Hi, you two.
From what I've read from other iOS users here on the forums, your devices are just running out of RAM. Photosynth is going to need some space on the device to work, so try to close all other apps and only have Photosynth open when you're trying to stitch a new panorama.
I'm sure that you can have other apps running in the background when you're just *viewing* panoramas (maybe even capturing), but when stitching them, you should probably let Photosynth be the only open app.
To read some solutions from your fellow app-users, read this discussion: