A cross fade is when you fade one source out, while fading another source in, such that they "cross". I used a cross fade in my song "Adity" available at http://www.slackmaster2000.com . At the end during the guitar solo, the heavy rythym track fades out while the light acoustic rythym track fades in.
Cross fading provides a smooth transistion...one source seems to dissolve into the other.