CS3's photomerge [...] works from jpgs or tiffs, not RAW.
I run it from raw files, though!
LR part :
I select the suitable files in LR, sync-edit them as I would in ACR (IE to show all the information and be even from one frame to another, not necessary to have the most pop), mark them with a red flag to be able to tell them apart in Bridge, and make sure all of these are written to XMP (for me, it's auto-write).
Explorer-Bridge part :
Then, right-click in LR / show in explorer, and right-click on the raw file in explorer / open with Bridge : Bridge opens the right folder.
I add the red flag in Bridge's filter and see only the few files to merge. I select them all and make Tools / Photoshop / Photomerge : PS shows me directly the photomerge dialog, bypassing the ACR dialog (LR adjustments are used if they are written in the XMP, together with ACR's last output settings - be sure to have the right bit depth, res and color space already choosen).
I usually select the Cylindrical projection and click OK (the Auto choice has consistently given me sub-par results).
I let the machine sweat for... a (fair) while, and go back to the screen, only to be amazed at the result in 99% of cases.
I then edit as a PSD in PS, generally with a fait amount of masked layers (light can be quite uneven with such view angles), until printing.
NB : With my R1800 (latest XPSP2 driver), I had an error in PS while selecting a paper length > 115cm (46") ; I tried Qimage and it seems promising regarding this problem (130cm OK). I heard about the R1800 software 44" limitation... But here 45" is OK, and the driver itself lets me set the paper length up to 327cm. I'm a bit confused on this point.
The main problem is to get the PSD file back in LR, as it can't be more than 10.000 pix wide... As I do all the printing and exports from PS, it's only a DAM problem - and I don't do panos often enough to lose sleep on this.