Dave, I think a beach setting will be really hard to stitch together, especially the horizon and above. As fars as the number of photos, I did that many photos because I thought I needed that much overlap in order to get Autostitch to work right. I also tried to shoot around 50 mm focal length.
The camera I used for my images was a Canon EOS 30D, 8 meg. I don't think that is really necessary though as I mentioned before, a 3 meg camera will be fine too.
The pointing down and pointing up, absolutely have to be done, if not they have to be filled in. Which is what I had to do. My downward shots were of concrete with little discernible features, so Autostitch just skipped what it couldn't figure out (and actually left an empty black segment). Same with the ceiling.
Regarding fewer photos delivering similar results, definitely will not (I tried and I also tried at wide angle). Autostitch just needs lots of material to resolve the floor to ceiling 360 degree views. I'm sort of curious how a solid blue sky would work, since there is nothing to match, but that wasn't your questions.
It was funny, on one version, I didn't fill in the blank sections, and processed it, I ended up with the most odd looking image. I think it is posted earlier in this forum.
You didn't ask the question, but I used a tripod and angled the camera down and just took photos every 20 degrees or so in a circle, then I lifted the camera angle and circled again, and continued until I was pointing straight up. It's amazing how many photos I ended up taking.
scott H