I'm going to assume you're using AGS 3.
Did you follow these instructions (from the header?)
// Import this script module
I assume you did this

But for someone else following along at home, just open a new project using the default template (not the empty template) and in the top right pane, right click on Scripts, select Import Script... and then select the Panorama3d.scm file. I recommend also double clicking on General Settings and selecting colour depth of 16 or 32 bit and resolution of 320x240 on the left hand side.
// Set the player coordinates to 0,0
This is important because the room background is larger than the screen. If the player is left at the default position, the viewport on the background is scrolled to try to center the player, whereas the code draws the 3d view at the top left of the room background. To set the player position, open the Characters section on the right and double click on cEgo. In the property section below, in the Design sub section, set StartX and StartY to 0.
// Import the cube map for the background
// Create a new background frame in the room and import the cube map again
Open the Rooms section on the right, and then the 1: sub section. Double click on Edit Room. In the panel on the left, click the "Change..." button next to the "Main background" button and select your cube map. Then press the "Main background" button and select <Import new background...>, then select the cube map again.
// Set the background animation delay to 0 (to stop animating)
// Set ShowPlayerCharacter to false
Go to the properties pane in the bottom right, and in the Settings section, set the BackgroundAnimationDelay to 0. Then double click on ShowPlayerCharacter to toggle it to False.
This is to stop the 2d player being drawn on top of the 3d view.
// From the room_Load function, call Panorama3d.CreateFromBackground and Panorama3d.Enable
// From the room_repExec function, call Panorama3d.StandardLookAround()
// or Panorama3d.TurnRelativeToOrigin(Mouse.IsButtonPressed(eButtonLeft), 2060)
// sprite drawn at origin ^
Click the little lightning bolt underneath the "(Room; number 1)" button, and in the Events section below, click on the "Enters room before fade-in" line. Then click on the "..." button on the right. This pops up the room_Load function in the editor window on the left. Paste this code into the function:
Panorama3d.CreateFromBackground();
Panorama3d.Enable();
Double click on "Edit room" in the top right pane again.
Click on the "Repeatedly execute" event line in the bottom left pane, then click on the "..." button to bring up the code editor. Paste this code where the cursor is placed, in the room_RepExec function:
Panorama3d.TurnRelativeToOrigin(Mouse.IsButtonDown(eMouseLeft), 2060);
Now press F5 to compile and test the game!
My confusion was the whole room_Load function. I have no idea where it is, and anything that came close to it gave me errors. So, i'm going to disassemble the source and see how things work.
This is probably where things went wrong. You need to create these functions through the editor (by pressing the "..." button in the event section) before you can use them in the room script.
Also I noticed how the project is set to 320x240, yet the window is much larger. Why is that?
This is because the image needed to create the 320x240 is much larger - it needs to include the details all around, not just in the direction you're currently facing.
Hope this helps!
Steve