It seems that Apple has been holding out on us: the camera app has a built-in panorama option that was left disabled in iOS 5. Developer and hacker @conradev has figured out how to enable the feature:
So, I found out how to enable Panorama is the iOS Camera app. Set the key 'EnableFirebreak' to YES in com.apple.mobileslideshow.plist
For those not interested in hacking around in their own .plists, fellow developer chpwn has submitted a tweak called Firebreak to Cydia that will enable the feature; it should be available within 24 hours.