$('a.fade').hover(function(){$(this).animate({color: \"#COLOR1\"}, 500);},function(){$(this).animate({color: \"#COLOR2\"}, 500);});
I've found a few but none of them where how i wanted it to fade, but if i can find an example i'll post it.
http://docs.jquery.com/Effects/animate
Why not try this tutorial http://css-tricks.com/color-fading-menu-with-jquery/