I have the same video card. With either EXA or UXA on Karmic, blur is
working fine for me.

-- 
[i965] Compiz blur plugin causes screen garbage (UXA bug)
https://bugs.launchpad.net/bugs/363174
You received this bug notification because you are a member of Ubuntu-X,
which is the registrant for xf86-video-intel.

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