The crossfade option in iTunes can be found under Edit->Preferences->Playback, but this is different from gapless playback, and will override any gapless playback in iTunes unless those particular tracks are set with the "Part of a Gapless Album" flag on.
For playback on the iPod, are you using a 5G iPod or a 2G Nano? These are the only models that support any kind of gapless playback. Older models do not support this feature at this time.
When playing the tracks on the iPod itself, if they are not playing gaplessly, check to ensure that shuffle is turned OFF (tracks will not play gaplessly when the iPod is in shuffle mode, even if you're only shuffling "Albums"). Also ensure that you have the latest firmware update on your iPod (latest is v1.2.1 for the 5G -- at least v1.2 is required for gapless playback). You can check your firmware version in the iTunes "Summary" tab for your iPod, or by selecting Settings->About on the iPod itself.
When you say that the tracks play gaplessly in iTunes, are you referring to the tracks in your iTunes library (ie, on your computer), or are you playing them from the iPod through your computer? Regardless, you may want to try removing these tracks from the iPod and re-adding them to ensure that the gapless information was transferred properly.
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