When you shoot multiple pictures from a single point, you can imagine that everything is drawn on a shpere - just like you see it around you. But then you want to project this sphere into a plane image. This can not be done without distortions, but this can be done in various ways (the same thing occures when drawing geographic maps).

This is a view from my window in Moscow, it was done in spring 2007.

I want to make a panorama using this five pictures. This can be done in a few ways. First, you can keep any set of parallel lines. Objects are bended or scaled but not compressed. This is done using Mercator projections.

All vertical lines are parallel:

All lines which go along the street are parallel:

All lines which go across the street are parallel:

Usually it is better to keep vertical lines parallel. It is uncomfortable when vertical objects (trees, houses etc.) are bended, but nobody is surprised if parallel rails go towards each other in the distance. But, of course, exclusions are possible.

Vertical panorama. Horizontal and vertical lines are parallel.

You can also make the panorama in such a way that some plane remains undistorted. All parallel planes are also undistorted but have different scales.

Front plane of houses on the other side of the street is not distorted:

Front plane of houses, which stays across the street on the right is not distorted:

Ground level is not distorted: