Yep, this works a treat:

Pixastic is an experimental library which allows you to perform a variety of operations on images using just a bit of JavaScript. The effects supported out of the box include desaturation/greyscale, invert, flipping, brightness/contrast adjustment, hue/saturation, emboss, blur, and many more...

Pixastic works by utilizing the HTML5 Canvas element which provides access to raw pixel data, thereby opening up for more advanced image effects. This is where the "experimental" part comes into play. Canvas is only supported by some browsers and unfortunately Internet Explorer is not one of them. It is however well supported in both Firefox and Opera and support for Safari only just arrived with the recent Safari 4 (beta) release. Chrome currently works in the dev channel. A few of the effects have been simulated in IE using the age old proprietary filters. While these filters are much faster than their Canvas friends, they are few and limited. Hopefully we will one day have real Canvas on IE as well...

Alternatively you could use StackBlur or Superfast Blur

This is also good to consider:

http://tympanus.net/codrops/2011/12/14/item-blur-effect-with-css3-and-jquery/

http://tympanus.net/codrops/2011/11/18/fullscreen-image-blur-effect-with-html5/