Yes, the better your shots, i.e., alignment, exposure etc, the better pano you can make.

I dont know about cs3's capacity although I know some bigshots that use it for stitching. I like the arcsoft pano maker software, I would not be afraid to buy it I just have yet to update. the new versions read raw files I believe.

while there are a lot of factors that contribute to well done panos, the keys, assuming your composition is done well, are to shoot a evenly lit subject in manual mode, maintain a level rotation, use proper overlap, shoot at normal or slightly telephoto, and rotate the pan around the lens nodal point. This is the reason some use focusing rails or long dovetail plates. . .