As long as a panoramic photo is captured in the "conventional way" (with its plane of rotation parallel to the horizon) so-called distortion is minimal- maybe even undetectible. When that plane begins to tilt away from level, distortion begins to be perceived. If a full 360 view is captured, any planes or lines that are parallel to the horizon appear as a sinusoidal curve.
|HARVEST WAVE, © Bill Brockmeier, all rights reserved|
This curving of features that otherwise should appear as lines is entirely a consequence of geometry, rather than a deficiency of the imaging system. Imagine that the rotation of a panoramic camera setup sweeps out a cylindrical view of space as it rotates through 360 degrees. If a planar feature in the view (the earth's surface/horizon, for instance) is perpendicular to the cylinder (the rotation is level) the plane will trace out a feature on the cylinder that is a straight line when unwrapped (which is what happens when the pano photograph is printed on a flat sheet of paper).
But if the plane (the horizon) is tilted with respect to the cylindrical view, and the cylinder then unwrapped, you will see that the traced out pattern is now a complete sine curve. The amplitude of the curvature (distance from peak to valley) is a function of the degree of tilt between the plane and the cylinder.
Well, enough on this. I believe I've beaten this dead horse more than sufficiently, and I think you can see that "distortion" is really a matter of personal perspective. What one person might consider a distortion of physical reality is merely one of the myriad (NOTE for Michael: "myriad" is a Greek word meaning, specifically, "ten thousand") ways of reasonably mapping or interpreting the real world onto a finite piece of a two dimensional surface. I don't believe anyone can categorically or authoritatively state that any one particular mapping or interpretation is to be absolutely preferred over another.
I believe it is ultimately important in the arts (of which photography is certainly one) to remember the treachery of images– that the image (the artistic creation) is NOT the reality which inspired it. And it is good to remember that photographic "purity" is more a phantom than a reality...that "distortion" is really the foundation of the photographic arts rather than its bane.