function to control an rgb led

Hi! As you saw, your problem is really that you're not writing async code (plus digitalWrite only takes a digital value, not an analog one). Ideally you'd call analogWrite every so often to update the output

You probably want something like this:

var colFrom = [0,0,1]; // blue
var colTo = [1,0,0]; // red
var colFade = 0;
var colors = [
  [0,1,0],
  [1,1,0],
  [0,1,1],
  [0,0,0]
];

function onTimer() {
  // fade a bit more...
  colFade += 0.05;
  // we've completed fading
  if (colFade>=1) {
    // try and fade to a new color
    if (colors.length) {
      colFrom = colTo;
      colTo = colors.shift();
      colFade = 0;
    } else {
      // no more colors - stop for now
      colFade = 1;
    }
  }
  // you may not need soft:true - it depends on your board and what pins you're using
  analogWrite(LED1,colFrom[0]*(1-colFade) + colTo[0]*colFade, {soft:true});
  analogWrite(LED2,colFrom[1]*(1-colFade) + colTo[1]*colFade, {soft:true});
  analogWrite(LED3,colFrom[2]*(1-colFade) + colTo[2]*colFade, {soft:true});
}

function onButton() {
  // add a new, random color
  colors.push([Math.random(),Math.random(),Math.random()]);
}
setInterval(onTimer, 100);
setWatch(onButton, BTN, {repeat:true, edge:"rising", debounce:50});

This starts off fading through colors, but when you press a button it'll add a new color to the end of colors to fade to