A real-time approximately 360 degree image correction system and a method for alleviating distortion and perception problems in images captured by omni-directional cameras. In general, the real-time panoramic image correction method generates a warp table from pixel coordinates of a panoramic image and applies the warp table to the panoramic image to create a corrected panoramic image. The corrections are performed using a parametric class of warping functions that include Spatially Varying Uniform (SVU) scaling functions. The SVU scaling functions and scaling factors are used to perform vertical scaling and horizontal scaling on the panoramic image pixel coordinates. A horizontal distortion correction is performed using the SVU scaling functions at at least two different scaling factors. This processing generates a warp table that can be applied to the panoramic image to yield the corrected panoramic image. In one embodiment the warp table is concatenated with a stitching table used to create the panoramic image.