The "crunching" feeling between 1->2 is mostly due to timing and the way you shift. If you shift too quick or too slow, you'll get the "crunching" feel. If you shift quick and at low revs, you'll get the "crunching" feel. The happy spot I found is around 4-4.5RPM to shift from 1->2 with a slight pause in between. If you find the right timing, 1->2 will just slide right in...don't ever try to jam it in or it'll "crunch".
I though I had issue with my transmission for the 1st year I had it. Took it to several mechanics who took test drives with it and they all said it was fine and "normal". Then I learned how to drive it "properly"...just needed more seat time on the car
The ZHP knob does improve the feel and makes it more enjoyable to drive!