I don't think in-camera stitching would be so great. I have recently been trying a few different ones lately (eg Canon PhotoStitch, autostitch, Serif, AutoPano). The ones that give the best results (autostitch and AutoPano) take a lot of processing as it quite often isn't as simple as merging the pics together at the overlap seam. They also help correct perspective distortions and other effects.
On the other hand, adding a simple panorama assist (at least for cameras that don't do it natively) seems plausible and quite possibly doable (coming from a non-programmer).
As a side note to this, I had bought my parents a Canon A2000 for their trip to Alaska, but was disappointed it didn't have panorama assist which would've been nice for them if they could figure out how to work it (a CHDK version wouldn't have helped them though as they are very technically inept at any sort of technology)
