I used Photoshop Elements version 9 for this project. The hardest part of this is to pick a photo that will work well. It helps to have a photo that has sky colors that match on the left and right edges, and a horizon that is the same height on each edge. Here is the original photo:
I rotated this photo left 2.5 degrees (Image > rotate > custom) to get the tops of the far left and far right buildings even, then cloned out the power line across the sky. It helps to overlay a grid across the image to get it even (View > Grid). The next step is to rotate the adjusted image 180 degrees (Image > rotate > 180)
The next step creates the Little Planet. The results are pretty unpredictable, so it is always kind of exciting to see what happens. Filter > Distort > Polar Coordinates. Select "Rectangular To Polar" and click OK.
Next, fine-tune the image. In this case, I chose to rotate it back so that the lamp post was on the bottom. I also blended the line in the sky and some other parts of the same line using the healing brush and clone stamp tools. Many images will have distracting patterns in the corners that you may want to crop out or retouch. The final image, as seen in the beginning of this post, was stretched to a circle. Resize > Image Size, then uncheck "constrain proportions" and type in new dimensions so that width and height are equal. Finally, crop, retouch, and adjust as desired to get your masterpiece.