I thas been my experience that the 'seams' that you see do not actually show up in the print if done on Photoshop. However, some of it may not line up the way you think it should. By overlapping at least 2/3 in each frame, you should be able to eliminate that issue. Also, be sure to adjust for lighting differences using a shutter speed, not the aperture. I do not know of any other blending algorithms, but if you go into photoshop there are several options for how to blend the images together. Under File, Automate, photomerge.
It's important to keep the exposure constant between pictures so it's always best to set the camera to Manual mode and use a middle-ground setting between the lightest and darkest areas of your panorama. If you still have dynamic range problems you can try to solve them in postproduction or by going the HDR way (but that will increase the overall processing time). If you took the pictures the right way (overlapping them, using a tripod) you shouldn't see visible seams between them. If you still want to try an alternative to Photoshop to stitch the pictures I can suggest trying Hugin, a multi-platform opensource software.
http://hugin.sourceforge.net
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