Photomerge is a specialized “mini-application” within Photoshop that assists in combining multiple images into a single photo. You can access it from either Photoshop or Bridge. Depending on the resolution of your sources and the speed of your machine, it can take a while to complete.
Read the full tutorial at TipSquirrel – http://www.tipsquirrel.com/index.php/2011/02/mastering-the-photomerge-command-part-1-2/