I have not tried mosaics yet but would guess it would be easier to use PictureWindow (PW) Pro 2.5 than either Photoshop 4 or 5. Back in the old days when I was
using Photoshop 2.5 (no layers) for tricolor stacking of images, it was quite
difficult to move and then rotate images to match them up. With Picture Window it
is much easier as the movement and rotation is done automatically. Also the
multipoint registration should help in aligning images with curved fields and other
optical aberrations. Also PW is far cheaper and easier to use when registering
images than any of the Photoshop versions.
Regarding your question, Photoshop 4 has no central pivot point (that I can
see) in FREE TRANSFORM that you can move. It seems to merely pivot at the center of
the image. However, Photoshop 5 does have a moveable pivot point in FREE TRANSFORM
as the article indicates. As is typical with Photoshop they have also changed the
location of FREE TRANSFORM. In order to get there you now click on a selection tool
(e.g. use a Marquee), then EDIT and then FREE TRANSFORM. You will see in the center
of the free transform box a central dark circle with small cross hairs. This is the
pivot point which can easily be repositioned with your mouse before you rotate.