The nodal point should be directly over the center of the tripod, thus when the camera is rotated to make panorama images, parallax shifts can be avoid. The usual way of finding the nodal point for a particular set up is to aim the camera at two poles, one closer to the camera and the other one in the distance. When the camera is rotated over its nodal point, the relative position of the two poles to each other should not shift. If he camera is not rotated over its nodal point, the relative position of the two poles as looking through the camera will change as the camera rotates.
To do this properly, I used the MRR-CL II nodal slide and the BH-40 LR bullhead from Really Right Stuff on top of my Gitzo GT2541 tripod.
I then used the 85mm lens set up to take 7 pictures of the back garden to make a panorama.
As you can see that I did not have the camera perfectly leveled, otherwise the panorama is perfect.
Here is the image after leveling and cropped in the Photoshop.
At 300 dpi, the image is 71.5 inches wide! The image has an uncannily flat feeling since everything is correctly proportioned without any distortion.
Here is a panorama of three images taken with 70-200mm lens set at 110mm with the camera turned vertically.
As you can see that the computer has to adjust the image according to the distortion of the lens, the two images on the right and left have to be widened toward the outside edges, and the railing is also not straight.
When the lens distortion of each of the three images was corrected in NX2 then stitched together in Photoshop, the railing is now straight but the two sides are still widened a bit, although less than the image before.
The final cropped image still looks very good, at 300 dpi it is 25.6x13.3 inches.
Thus for me the perfect setup for panorama image will be using the 85mm 1.4 lens which has almost no lens distortion. As leveling is also very important in the panorama image, my complete setup for a real job will be Really Right Stuff MPR_CL II Nodal Slide with PCL-1 Panning Clamp on top of the Gitzo G2272M fluid head and Gitzo GT2541 tripod.