In this rant I'm going to talk conceptually about taking photos for panoramas.

Imagine the line of the horizon going through the center of your vision, like this:
panorama_1

Now, if we overlap three images by a little, we get this: panorama_1

Except that the angle has changed a little, so we really something get this:
panorama_1
Notice that the horizon is still going straight through all the images, even when composited.

The change in angle means that the ending image area is going to be a little contracted, since we don't want funky white triangles in our final image. The purple here shows what the final image dimensions would be:
panorama_1

Now, if we're looking down even a little, the horizon starts to curve. It looks something like this:
panorama_1

See how the horizons stop matching up? You get a bumpy image. We can compensate by doing this:
panorama_1

But notice how the final area shrank again, and now the edges of the horizon are falling down into the corners of the image. This is generally an unwanted side effect, that we can avoid by keeping the viewing plane level.

It is worth mentioning that you can compensate for angle change with clever camera tilting. This is extremely difficult, so I personally would not recommend it.

Thanks for reading!

-Tentus