It seems that one developer has done a little digging inside the camera app and discovered that editing a particular .plist file will make the missing panorama mode available. If you don�t know much about editing file lists and stuff there is good news. A new tweak has been made available via Cydia called Firebreak the will allow users to enable the camera�s panorama mode without any file editing required.
In order for this tweak to work you will have to have iOS 5 or higher and a gyroscope capable device. No icons will be added to your homescreen and the panorama button will be added to the options menu in the camera app. Firebreak is available free from the jailbreak app store and once installed it will do everything for you. You will need to have a jailbroken iDevice in order to take advantage of this tweak and there are plenty of ways to do this.
There is still now answer as to why Apple have kept this out of iOS but we are sure someone has a reason for this. For now if you want to use the panorama camera function you will be required to jailbreak your iOS 5 device and download the free Firebreak app from Cydia.