Had a little mess around. I didn't bother searching for too long for variations of the same music track to test with but found 2 on dig.ccmixter.org that are basically different versions of the same song. Anyway...
There would be a perfect solution for fading one track into the next if the fade sound action part actually worked the way I expected it to work. It can fade from whatever the current volume value is to a value higher or lower, but if you try using it again on the same sound then it seems to fade the sound out completely regardless of what value you use.
Next I tried to wrap my head around the new sound engine & mixer container things, but I couldn't figure out how to tweak the volume values for them with Lua script. I just kept generating issues.
Finally I decided to try the openAL sound engine via Lua script & I managed to get that working after a bit of hassle.
C (released) will toggle between scene 101 & 102.
T (released) will toggle between song A & song B.
Q (released) will quit the game.
P.S: like I said, I didn't have perfect tracks to test with like the ones in monkey island 2, so the timings aren't perfect between the 2 tracks, but at least you can see that it's possible to play multiple tracks at the same time, toggle between scene while the music carries on playing & fade one track into another. Hopefully Simon can make the fade sound action part do what I expected it to do or add an action part for tweening sound volumes without stopping the sound after fading to the new value.
* edit: managed to find an mp3 version of the woodtick tune from monkey 2. I used Audacity to chop up 2 segments of the track with the same duration. I also managed to get the Mix busses to work in the new sound engine, though they gave me a bit of grief for a while as I couldn't seem to get the first track to fade out as it wasn't registering the first automation I added to it. For some reason it started working after I created a second automation. It still worked after deleting the second automation, so all good now I guess.
I didn't add the flourish transitions, but I assume they can be done via the sync/switch containers, but I have no idea how to use them at the minute.