one that I've used that works fantastically well is called
Stitcher. The only downside is that it's pretty pricey... I think they have a trial version, but I'd have to check. It not only does panoramas, but you can do Quicktime VRs... in other words, a full 360° pano that's really interactive. It'll automatically put your pics where it thinks they need to go, and it's usually pretty good about that. It also corrects for barrel distortion, so it gives you a great pano.
What I use now, however, is Photoshop. It may be a little more intensive, but you have all the control. If you don't mind spending the time and you have a mind for it, it works great.
I haven't tried any of the programs that Triglav mentioned, so you should check those out, too.
