The most common reasons for crossfade not working are:

1. If you are using Pocket Tunes Basic, the crossfade feature is not available.  Find out what version you have installed.  Purchase an upgrade to Pocket Tunes Deluxe to use crossfade.
2. Adjacent songs must use the same sampling rate (kHz).  If you copied the music from your own CDs, then mostly likely they have the same sampling rate.  If you obtained the files from elsewhere, then they may not all be using the same sampling rates.
3. Because of the slow processor on many Palm devices, you must give the Palm some time to compute the crossfade data.  That means that you can't immediately seek to the end of the song or switch to the next song and expect the crossfade to happen.  You have to patiently wait until the end of the song, and then the crossfade will occur.
4. If you are playing copy-protected music from online music stores (such as Napster, Yahoo, or Rhapsody), then crossfade is not available.
5. Double-check the memory requirements displayed in the Crossfade Prefs screen.  The requirements listed are estimates, so if you're close to the limit, it might not work.