I found a great function on iTunes this evening. If you're setting up a party, and your megamix needs that certain professional touch, try this. Go to the options in your iTunes menu (apple+,).
Under the Playback tab, toggle the crossfader Playback tab. You can set up to a 12 second crossfade. Or set it to 0 for standard play.
If you really want to get tricky, find the BPM of the songs on your playlist, then your songs will mix better. Happy Listening.
I tried the crossfader function on my Miami Bass playlist. Superb.
The crossfader settings will not transfer to your iPod.