Hi,
it seems that the big challenge with creating a mosaic is to get comparable intensity levels on the images that are being stitched together. Clearly this is something that needs to be done before attempting to do the mosaic but I doubt the seam between images can ever be expected to be invisible.
I imagine when mosaics are made with conventional tools (PS) folks use blending masks of some sort. I propose a similar feature for PI but more sophisticated
Each pixel in the overlapping area has a distance to both images. Let's have the pixel value be a inversely proportional mix of the two image values and their distance. Assume images A and B with pixel P being in the overlap area:
O(AB) = overlap between A and B at pixel P
D(A) = distance from pixel P to the edge of A
D(B) = distance from pixel P to the edge of B
P(A) = value of pixel P in image A (same for B, M)
P(M) = P(A) * D(B)/(D(A) + D(B) + P(B) * D(A)/(D(A)+D(B)
So when we reach the edge of the overlap it takes the value of the image we're about to transition into. I think this also works in corners.