EDIT: 10 years have passed and most of the software below is outdated. I would today recommend the Hugin Panorama photo stitcher.
Here are some freeware image stitchers:
Microsoft's Image Composite Editor
The application takes a set of
overlapping photographs of a scene
shot from a single camera location and
creates a high-resolution panorama
incorporating all the source images at
full resolution. The stitched panorama
can be saved in a wide variety of
formats.

Autostitch
Choose your pictures and let it format the photos into a single combined panorama. All lighting corrections and blending are done for you.

Panorama Perfect Lite
Using nodes on the blending area of each photo, you can match each structure (tree, building etc.) to ensure that there is no distortion when joining. More complex, but better stitch without the bending and distortion you sometimes get with Autostitch.

Windows Live Photo Gallery
Used for managing your photos, but the Make menu contains a "Panorama Stitcher". Select the photos from the thumbnails viewer, and the program does the rest. Cropping and adjustment is immediately at hand under the Fix menu.
