Fading colors
Palette fades
Palettes can be faded to white or black by respectively incrementing or decrementing each color component of each color individually. Of course, care has to be taken so that each value stops at $1F or 0.
Fading to a specific color can also be done this way, by comparing each actual components to the target ones and incrementing/decrementing them accordingly.
Simulated fades
Since it has the highest priority on the screen, the fix layer can be used to fade the underlaying display by using pre-dithered tiles. This can only be used if the fix doesn't have to show important information.
This is also used in Metal Slug 3 as transitions in between areas of certain levels (uses a sprite layer instead of the fix ?).