The original Panotools doesn't work in OSX and is very buggy in classic - "Photoshop Elements has unexpectedly quit" messages left right and centre when I last tried about a year ago (but that was using 10.1.5 - things may be better with Jaguar or Panther) - I found I needed to be able to run in OS9 to use panotools effectively. You don't need to install Elements under OS9 - to run in OS9 just reboot in OS9 and away you go. To run elements in classic (in the event that you have a machine that can't run OS9) you need to click on the Elements icon in the finder and then get info and tick on the check box that says start the application in classic (you are generally better starting classic first and then opening Elements)
However installing panotools OS9 version is fiddly and the documentation is rather scanty and it's not easy to find the right information in it.
There is a shareware GUI for panotools that runs in OSX called PTMac and - unlike panotools- it is not free but when I tried the demo it was much easier to install. They also produce an OSX lens correction software for OSX called PTlens (which is all that I have used panotools for). Downloading the tryouts for these
(
http://www.kekus.com/index.html) may be worth a go, although I decided I didn't use panotools often enough to make it worth the price and I can run in OS9 for nothing.