Let me start by saying that the first photo, the "desired" one, it's really terrible: look at the sky and look at the guy on the left's ghost.
For the best results in panoramas photo, maybe in order from easier to hardest
1 - Don't stitch thing by yourself in Photoshop. You have many option, and altough I can't tell you which is the best of the best, I can offer you a couple of advices:
- Hugin is very good and gives you an amazing level of control over things.
- Microsoft ICE gives amazing results but not much control over things.
I usually use both; Hugin to have a lot of control and more options, and ICE for those situations where the starting shoots are so good (from a panorama point of view) that they really don't need more than a 30 seconds click-click-click process. Sometimes I even use both, then decide. And Hugin has the amazing and unnerving capability to go in the totally wrong direction, sometimes.
ICE is noticeable for other two things, too:
- it has the capability to fill in voids (not that it can do that much, but when it works...it's a joy)
- it can publish your panorama on some kind of viewer or such. But I've never used this feature, so I can't tell much more.
2 - Shoot in raw, if you can. You should try to keep your exposure constant during shooting, but using RAW allows you to correct a lot after. And both Hugin and ICE can load RAW, so they even can do all work for you (but I prefer to do that myself)
3 - When possibile to do it, moving around with the camera (but parallel to your subject, i.e.: keep the same distance from it) gives better results, reasons for this in point 4
4 - Don't rotate around yourself. Don't rotate around the camera body. You need to rotate around the Panoramic Pivot Point
5 - End of the previous page: if you fall in love with panorama photos, buy a really good tripod and panorama staff/stuff/thingie.
6 - Tilt'n'shift lenses can help, but not that much. Nearly nothing, honestly, unless you are trying to shoot a very vertical building. Because if you use a tilt'n'shift, shoot in jpeg, stitch in Photoshop, don't take care about exposure, and don't rotate camera properly, you just wasted a huge amount of money to have a terrible shot with a slightly better vertical perspective :-D