Not too sure if you have any plans to upgrade to CS3, but major improvements have been made to the Photomerge feature in CS3 over CS2. I've also heard a lot of people talk about
PTGUI which seems to offer good stitching results.
I mainly use
Realviz Stitcher Unlimited for my panoramics, I will often use Photoshop first, saving the file after Photomerge has finished, then open up Realviz Stitcher and process the same files. After saving both as full resolution Tiff files they can then be compared back in Photoshop, 99% of the time Realviz has much sharper seams and offers more output options for your panoramic.
However, Realviz software is expensive, so it may just be worth upgrading to CS3, do try PTGUI though as it does get a lot of good reviews.