Best way I can think of is to know the dimensions of the two photos, start a PS Touch project that's roughly the additive width of those two photos (e.g. If both photos are about 1000 pixels across, start with a project of about 2000 pixels wide or more), then place each photo on its own layer using the "add image" button (2nd icon from the upper left).
Use the "transform" icon (5th icon from the upper right) to change a layer's size, position, etc. Adjust one layer's transparency while you place them together. Put it back to 100% opacity when done.
When making a panorama, remember to have an overlapping point (usually about 20 to 30%) between the two photos. This makes it easier to stitch.