Is it possible to crossfade songs on an iPhone?
Solution 1:
I'm sorry, I don't think it is possible (yet). If you had an old iPod Nano/Classic then I might have suggested 'Rockbox' (give it a google). Send Apple a feature request about it, they never know, if enough people bombard them with requests then maybe it will become a native feature.
Sorry I can't be of more help.
Solution 2:
I added a new app myself, because I wasn't happy with the other ones out there. MediaMix didn't allow scrubbing, and MyDJ applied a flat "n seconds" crossfade to all songs. I wanted something more customizable, so I wrote Muxic.
http://itunes.apple.com/us/app/muxic-intelligent-crossfading/id547091143?mt=8
Solution 3:
It isn't the native iPod player, but Media Mix (link to free version) allows crossfading.