This is a classic case of using "layer masks"
To start with the photo was staged for the photographer. This means the jazz band is cooperating with the shot. This is a lot different then shooting a crowd scene where the subjects are not aware that you are shooting a panorama.
It appears the jazz band is stationary, meaning they are not walking. There hands are moving while playing the instruments and the crowd is "pretty much" stationary as they are watching the event happen.
As Dave states the shot was taken in very good sunlight allowing a fast shutter speed. This is the first requirement to get this shot.
The next trick is to take several exposures of each frame. Probably 2 or 3. The light in this scene allowes for proper exposure without bracketing. Although it could have been done with only one shot per frame. The only issue is the seam blending between frames. This is where we get the "ghosts" and cut of hands and feet kind of thing.
The reason for taking the extra exposures is to capture the movement in different frames.
The image is stitched. Most likely using panotools as panotools is the "defacto" standard for stitching panos of ANY kind. You can do things using panotools that are not possible even with panoweaver or any other "auto" stitcher for that matter.
Back to the "layer blending". This technique requires the use of layer masks. If you have taken 2 or 3 shots for each frame then you have captured the movement in a sequence. Using photoshop you can then take these frames and create a layer mask with the other extra frames. When things move between frames it is possible to take the 2/3 shots and use one of these as the base. Then "paint" on the base frame revealing some of the other frames below it. This will allow you to put someones foot back to where it should be if it was moved during the shot. Or their hand, head or what ever.
This link explains this concept. In this tutorial the process of using layer masks to replace the legs of a walking couple that were cut off at the seams due to the order that the individual frames were put in to blend all of them into a panorama.
Using this technique one can eleminate "ghosts" that occur when shooting moving subjects.
In this example the photographer used this technique to clone in "Fudge" so that he is appearing everywhere in the image. There is actually only one dog. But using layer masks and taking multiple exposure for each frame he was able to make this panorama
I have tried to do this using Panoweaver but Panoweaver has some kind of problem outputting a layered photoshop file so it is not possoble to use layer masks when using panoweaver.