As per DailyTech,

Apple has released a new firmware update for 5G iPods. The new update adds support for games downloaded from Apple’s iTunes music store and more importantly, it adds support for gapless playback — no more 1-2 second pauses between songs. Fast scrolling through your library will also bring up a capitalized letter in the middle of the screen to indicate what section of the alphabet you’re flying past. There is also a new option under “Settings” to adjust the screen brightness.

To get the update, simply download and install iTunes 7 and the integrated iPod updater will install the firmware update for you.

I updated my 60GB iPod and was blown away by iTunes 7. It includes much better iPod integration and whole host of new features including a funky mode that has the album art flying past you!

The gapless playback works, it’s great. I tried it on Pink Floyd’s Echos album, and it really plays like it should. However, at higher volumes you can hear a very very low ‘pop’ sound…it’s really low but if you *were* to connect your iPod to a decent HiFi system - you will hear it!

Go ahead and grab Dark Side of the Moon and give it a spin