How does Photoshop blend layers when stitching panoramas?

Question

When I make panoramas in Photoshop CS6 (after selecting and preparing individual images in LR4), I sometimes wish to modify Photoshop's automatic blending of layers.  An example is when a moving person is in two or more adjacent frames & I wish to use a version from a different frame than PS selects.  The layer masks are all either pure white or pure black, thus selecting the portions of each frame that is used, but with no gray portions for blending.  Opacity of all layers is 100%.  So, some other invisible-to-me mechanism is being used to seamlessly blend the layers.  When I try to select portions of a different frame (in areas of overlap) by painting white on a mask and black on layer masks above it in the stack, I can partially make visible the desired area but it appears as partially transparent & thus low contrast.  How can I get full control of what is included in the final composite?

Answer 1

The selection of what pixels will go into the final image just appears to be done with a white or black mask, and with the most recent versions the masks overlap a bit so you can do things like resize the image or whatever before merging them together and not have transparent edges show up.
For blending, though, I believe Photomerge just alters the colors of the image pixels of each layer to match the colors.  This makes it difficult or near impossible to manually tidy up the results.  Usually I find that if I have mis-alignment I need to do something different to the input data (like match the exposures better in Camera Raw or something) to get Photomerge to more perfectly stitch them.  I've never had any luck trying to adjust things after the fact.
Frankly it's always something I wondered whether they'd polish up and make better someday.
-Noel