What is the best image characteristic for use with an environment layer?

CS6, Win7, HPz820

I have watched several tutorials on the use of the environment layer and each has a nifty experience with the image the imported.

When I do it, it looks like this without the Environment layer effect attached:

And this way then I apply the environment layer:

Is there a way to select the image so it will maximize the quality of the image when the effect is applied. I tried  a stitched image of several photos done in PS, with a better outcome but still a lot of distortion.