Obviously to have your music fade in and out, you can edit it with an audio editor. However during ambience > battle > arrival > etc. i.e. situational transitions, audio is abruptly broken with no transition.
I don't know whether this was ever addressed, but I was wondering if it would be possible for a FREDDer (or to have it as a feature you can flip on or off) to force a fade-out for x seconds on a given piece that's currently playing, to transition the upcoming piece that's about to play.
An option to cross-fade all music as the situational transitions transpire during a mission would also be nice.