You can find crossfading options here:
Prefs (Ctrl+P) > Output > double-click DirectSound output > tab Fading
Select each 'event' and uncheck 'Enabled'.
5.03 is quite
buggy. If I were you, I'd upgrade to
Winamp 5.08d (not 5.09 yet; wait for 5.091).
[edit]
Hey jmatthews