I tried out a 3.89 build last night. I used CoolEdit to split up a wave file of Tom Sawyer into three parts. I checked the three WAV files with WinAmp's gapless output plugin and they sounded correct. Then I ran LAME on the three files: "lame --nogap 01.wav 02.wav 03.wav" and it seemed to like those command-line parameters and it seemed to encode them properly. But when I played back the three files in WinAmp with the gapless output plugin, there was still a blip between each file.

So either the feature is not yet ready for prime time, or LAME isn't the answer.