Alternatively, try hugin... it does a great job at lining things up AND getting the levels just right so everything is quite smooth.
Added benefit: it's cross platform and open source!
No. I've only worked with Hugin which is of course a lot more powerful but also a (metric) fuckton more difficult to use for a beginner that just needs to stitch a few photos.
Here's a quick fix, it would be better with the original exif data though (which imgur strips). Without that I had to guess the focal length of your camera which warps things around the edges when not done correctly:
You are right, see here
The day is very short in december though and the sun does not rise very high in the sky. Kópavogur and Reykjavík are practically the same place.
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