I'm doing a combination of segmented music and crossfades for Courier's soundtrack. It makes a huge difference in immersion and what can be accomplished. The biggest difference is it helps the world feel more alive. I made a few demos of it in C2 to show it's perfectly doable and works nicely. Two are remixes (re-arranged then made them interactive) and one is a test track of my own.
Donkey Kong Country Minecart
Tracks can move anywhere at any time (some transition at the measure break, some instantly) as well as context-sensitive hits that can happen immediately.
Zelda Midna's Desperate Hour
The track smoothly transitions to different sections of the music based on your input. Can also dynamically add/remove the melody.
Original test track
Switching between different phases with transitions. Some concurrent hits, too.
It's neat stuff and a nice way to make a big difference in the production values for your game, though it does take some more work.