Google has a number of recommended articles for creating KML content. They’ve just linked to an article by panorama specialists 360cities.net which provides great details on making panoramas for Google Earth. The article is called “Converting Large Panoramic Images to PhotoOverlays for Google Earth with 360 Cities“. And, if you have any interest in creating panoramas for Google Earth, I highly recommend it. It even gives you tips on how to take panoramas, what equipment to buy, what software tools (including freeware) will help you create the best looking panoramas, and explains in detail how the advanced features of Google Earth PhotoOverlays work.
Here’s an example of what 360Cities panoramas look like in Google Earth:
Also, read this story about Gigapxl Photos with a video as well.