I know how to create a panoramic shot using several images taken side by side. My question is, can you create an up and down panoramic image of say, the sky and then the ground. Example: I take a picture of a beautiful sunset and then take a picture of the ground right below the sunset to show the two images combined to show an up and down panoramic shot of the effect of the sunset is having on the ground below it. Is this at all possible?
A vertical panorama? Well you can make multi row panoramas, so there is no reason that you couldn't stitch a single column. An excellent example (set of examples to be more accurate) are Herman Klaus's Vectoramas, which are taken with a hand held camera, merged to HDR in Photomatix, and stitched in Photoshop
Herman (aka Farbspiel) has an excellent site about HDR
And if you follow the Learn link on his page, there are some of the best step by step guides I've ever seen. The videos are an even better source of information, and demonstrate just how much work goes into making an image look like the one above