For the concern of distortion, it depends on several factors…lens, angle, subjects and where you place the horizontal line. I had some stich experinece long times ago, use some basic software (Nikon 4500?) that yield “not bad” results…
For outdoors landscape… I would say don’t worry too much about the distortion… human eyes are pretty “adaptive” to the landscape distortion (personal opinion). But for the architecture photos, that would be different story.
Factors
Normally,as we all know, the wideangle lens will encounter Barrel distortion. Tele lens will encounter Pincushion distortion. I will use standard lens (35~85 mm range) for stitch photos. I heard the new Photoshop CS2/ CS3 have some funtions dealing with this distortion very well. You might want to check them out.
Another factor is the loss of exposure on the edge “Vignetting”, this will cause some problem when you use wide angle lens again.
I am not sure the reason you choose the Canon G9. But for multiple purpose, I would suggest cheap DSLR will be more versatile (even their pixel value are a bit lower, in general, they produce better image)… well… what do I know :-/… just my opinion… Good luck for the shopping 😀