The Crossfade tool allows you to mix together 2 audio clips in a variety of ways. You can, for example:

To use the tool, first select the region of audio you want to perform the crossfade on. Next, go to Menu -> Effects -> Crossfade Selection... (Crossfade tools can also be found under Fade buttons of Levels and Effects tab toolbars). The Crossfade window will open.

(This settings window is also used when setting Crossfade settings under Crossfade to Other Clip.. and Crossfade Loop..)

Fade Windows
Fade Parameters
Present for both Fade Out and Fade In:
Gap Parameters
Fade Out and Fade In clips are two separate clips which will be mixed for the crossfade. The Gap determines how much the Fade Out and Fade In coincide.

Crossfade to Other Clip

The tool allows you to mix the audio file with another audio clip.

The clip to be crossfaded with audio file. Clip types are:
The position of the file where the clip will be inserted.
Select the position of the clip where crossfade will be applied. Only applicable on the clip position which connects to the file: either start or end of the clip.

Crossfade Loop

Apply crossfade in the transition of a looped file.

Loop count
Number of time the file will be played / looped.
Crossfade settings