I wished iPod had the crossfade feature, similar to what Winamp have since Winamp 5.x . This feature blends current track into the next track on playlist, it kind of mixes music and gives continuation.
Bad Bad Apple never gave this simple option in the provided firmware for iPod. So what could be the solution, googling suggest many but one application got my attention.
Rockbox , is what I was looking for. Tried to install and it went by like a breeze. Now I have option of playback as crossfade and also I can edit playlist at run time.