The way we attempted to do animations in Plight of the Weedunks involved using three of the animation blend channels.
Basically, you'd have a previous animation, your current animation, and a possible next. You could simplify this to just two channels easily, but we were trying to "pre-cache" animations as there were some which only followed on after specific actions, so the three-channel split made some sort of sense.
In this way, when an animation state changes, you fade out Current while fading Next in, then just move them down the line so that the "Next Channel" is free for whatever you're planning on doing afterwards.
Unfortunately, we had some odd bugs in this method in that we were moving the animation states down too quickly, so the weights weren't sorted by the next render frame, causing some interesting artifacts... this was a problem with how I was implementing it, and as I had a huge amount of other work to do, we eventually ripped out the animation blending, and used "immediate animations" where it just uses the one channel and changes whenever a new animation is called ( though we still kept the "pre-cache" system of following animations on after others where needed )
Dunno if that's of any use to you, but that's how I saw the animation channels/stages being used for.. obviously they can be interpreted in many ways which is the nice thing about programming, there's always a few ways to do the same thing
