Guitar one goes into the left most input (lets call it input 1). Guitar two goes into the next (lets call that one input 2). Now, its automatically set to 1 and 2 on the two select knobs at front, wich means that crossfader being all the way to the left = only input 1, and crossfader being all the way to the right = only input 2.
To sum up;
At back you have four inputs. The select knob at front sets the input of choise.
The crossfader fades between selected inputs.
But. It sounds as if you have two audio tracks where the guitars are, and not, say, Dr. Rex players. Meaning that there is an easier way for this. Go into edit mode and choose comp mode. Now crossfade into silence. And on clip two crossfade from silence.