The iPhone camera has a secret Easter Egg: a panorama mode. This special mode -- which Apple has not enabled for consumers yet -- will allow you to capture large panoramic scene using multiple photos. This is how you can enable it:
1. First, you should access the com.apple.mobileslideshow.plist in the iPhone (you will need to have developer access for this or a jailbroken phone).
2. Then, change the value of EnableFirebreak to Yes.
3. Done. A Panorama button will now appear when you click on Options, displaying a special interface to capture photos in succession, matching them to create the panoramic photo.
Why didn't Apple enable this mode for consumers? Perhaps because it feels cumbersome in this version. I'm sure that if they wanted to enable a panorama capture mode, they would do it in a more elegant way. After all, there are applications in the App Store that already perform this kind of function in a much elegant way. Talkin with Conrad Kramer, the person who discovered the secret mode, there will be a program to enable this for jailbroken iPhones too.
"A tweak will be out on Cydia tomorrow to enable it, iPhone 4 and newer, due to the iPhone 4 having a gyro."
Apparently, this works for iOS 5 only. [Twitter]