^It's pretty simple. There are just a few things to keep in mind.
1) Take all the pictures from the same spot. If you move the camera the assembled image won't make too much sense.
2) Make sure you have a good amount of overlap going from picture to picture, I usually have about 50% overlap from the last shot I took.
3) Put the camera in manual mode or the pictures will all have slight differences.
As far as assembling the pano goes, you can choose to do it by hand or use an automatic image stitcher. I use the program AutoStitch, because it works amazingly well and most importantly it's free.
You can download it here:
http://www.cs.ubc.ca/~mbrown/autostitch/autostitch.html
The program comes with a few sample images so you can get an idea of how much overlap you need for autostitch.