Digital cameras and methods that help a user accurately align sequential photographs to create large panoramas and composite photographs derived from a sequence of smaller photographs. This effectively creates a higher resolution, or larger, photograph from a zigzag series of photographs using a low resolution camera. An algorithm running on the camera guides a user through the image-taking procedure, allowing him or her to select if a panoramic or composite photograph is to be taken, and optionally the number of images (width and height) needed to create the final image. The algorithm displays indicia, such as marks or a shadow (transparent) image, that are overlaid and moved over the live image during the image-taking process to help align the subsequent image to be taken with the previously recorded image.