It's true that the new crossfade playback helps reduce the gap. But the gap is either still there, or there is a minimum 1 second fade between tracks. On a mix disc, that 1 second fade can sound really bad. And of course, this feature is only available on iTunes and not hte iPod.
Another reader has pointed out in private mail that this problem may be caused by iTunes inserting a small space at the end of tracks as it rips them from CD. I haven't yet looked into this but will over the next few days.