The stitching routines in elements is very poor.  Take a look at PTGui.
There are a number of other ones out there that are also good.

Scott

Try panorama factory:

http://www.panoramafactory.com/

you will never need anything more.

Nic.

You may want to check the photoshop groups.

This if free, doesn't need PS and does a pretty good job:

http://hugin.sourceforge.net/

It's been a while since I used elements, but I did some stitching
in elements 2 at one time. Use photomerge:

   From the file menu, click photomerge. A dialogue box
comes up, and you add the source images you want to use.
Then once you have all the files added, click "Attempt to
automatically arrange source images", and "Apply Perspective".
Then set image size reduction to 50%.

 If it doesn't automatically arrange, then unclick that option
and try it manually.

 Finally, click OK. There is a chapter covering this in the book:
Digital photography with adobe photoshop elements, by Cromhout and Fallon,
2002. They cover the more complex issue of adjusting levels between
each contributing piece.

Dave