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PS CS4: What's New — Auto-Align Layers
By way of review (Auto-Align Layers is not exactly new to CS4), this is a very useful thing in two respects: first, creating panoramas, and second, stacking layers of almost identical content in order to eliminate unwanted stuff — for example, taking several shots in a row of a group of people. Some will have their eyes closed or have a nuts look on their face. This function is excellent in creating a perfect end product.
Panoramas

The very first thing you want to do is take a series of images that are overlapped by about 1/3. There need to be areas of each image that overlap with near identical content for the stitching to take place.
Next, you want to bring all your images into one in a series of layers. In this image, I had 4 images. For three of them, I pressed Cmd-A and Cmd-C (Win: Cntl-A and Cntl-C) in order to select all the content, then copy it. After that, go back to, say, your first image and press Cmd-V (Win: Cntl-V) to paste the content in on a separate layer.
The Dialog Box

Now you're ready to start your stitching.
Press Edit > Auto-Align Layers to bring up this dialog box. As you can see, I've chosen the new Spherical option for this panorama. (We'll be going over only the new or enhanced stuff in CS4 — sort of).
Lens Correction Options
Vignette Removal: Some wide angle lenses produce these dark areas in the corners (the definition of vignetting). This check box is designed to minimize or eliminate those annoying dark corners.
Geometric Distortion: This check box is designed to minimize or eliminate effects from fish-eye lenses and telephoto lenses. The first tends to warp vertical lines outwards and the second tends to warp vertical lines inwards.
The Spherical Panorama

Pretty good job.
Cropping will need to be done and, clearly, Layer Masks will need to be created on each layer to paint away those nasty seams.
The Cylindrical Panorama

Interestingly enough, the product is virtually identical to the Spherical option. Also interesting, the results of these two are supposed to be very different! I guess this leaves just one option — you'll have to experiment for yourself. After stitching together a few panoramas, I prefer the Spherical thingy.
Collage

Well, here's the Collage option. It pretty much says what it does — makes a college out of a number of images that have some overlapping areas. I wouldn't use this to make a panorama.
As before, you bring all your images into a series of layers, select all of them, then choose the College function and let it do its magic.
Thing is...I didn't find it to be real magical. Maybe there wasn't enough of an overlap of content from one image to the next, but the end product was kind of a mess — the images didn't line up well at all.
In fact, I had to manually move every single image to get a semblance of a collage.
The black background was added by me as was the white strokes and drop shadows — those don't come with Collage.
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