Unlike the panorama function in, for example, IOS 6, Photo Sphere can take pictures in 360 degrees. The panorama function in IOS can only take panoramic pictures sideways and a maximum of 180 degrees.
With Photo Sphere you take a picture in every direction, up, down and sideways until you have created a 360 degree panorama around you. The result is that you get an interactive image that looks and works in much the same way as Google Street View.
The images created with Photo Sphere are stored as separate files containing information in the xml format to recreate the panoramic effect. The images can be uploaded to, for example, Google+ to display your panoramic images automatically.
Android 4.2 will first come to the phone Nexus 4 and the tablet Nexus 10. It is uncertain when the remaining manufacturers will make the update available.