Looks like I spoke a bit too soon. The multi zone solution does work, but introduces a new level of complexity to the interface. Having to manage two libraries and two UI's in Theatre View is not worth the feature.
However, is this not something that could just have a hotkey assigned it? Do you think it would be a big development effort to use an unassigned key combo to toggle through this functionality? You wouldn't need to worry about setting the length of the fade, that would have to be implicitly set from the options menu. This hot key simply toggles the four options under switch tracks in the options/playback menu.
Its a really good option to have, and I can understand why it wouldn't have been given a hotkey, and in any view other than theatre view it wouldn't be an issue. But to effectively use theatre view you have to keep out of the other views as much as possible, and not being able to toggle gapless on/off makes you use the main view.
Thanks again!!
Stu