Hi MSG - No, it is indeed possible to shoot upwards at tree tops and get very good results, but you have to do it correctly. It's all in the numbers. To make the discussion easy, let's assume we are shooting buildings with straight sides, not trees that taper towards the top.
Suppose that the tops of the buildings (in my example) are twice as far away from the camera as the bottoms of the buildings. To completely correct the keystone distortion in such shots, one has to scale the horizontal dimension of the component shots in the upper floors of the buildings by a factor of two. Actually, both the horiz and vert dimensions have to be scaled by roughly the same ratio (exact details depend on the projection used). This means that you must start with enough pixels in each component shot so that after this scaling, the resolution in the upper floors of the buildings never drops below whatever minimum value is acceptable to you.
The way to do this is to use a long lens and take many more component shots than you might originally think. Each of the component shots will be at the resolution of your camera body (eg, say, 20 Mpixels), so the overall size of the stitched image (in Megapixels) will be much larger than you might think, and will be able to support the enlargement of the upper floors of the buildings as needed to make this area appear to have the same magnification as the lower floors and prevent the resolution from dropping below whatever minimum value you set for yourself.
Keeping track of, and processing this many component shots can be time consuming and require a suitable computer, but it certainly can be done. The trick is simply to generate your panos from a very large number of telephoto shots, not be swayed by convenience and use a much smaller number of wide angle shots.
Of course, one can't have everything in life, and shooting so many telephoto shots will take more time, and, as you pointed out, in some situations, this amount of time may not be available, even if you use an automated pano mount.
HTH,
Tom M
