You may want to check this out.

http://www.jakeludington.com/pinnacle_studio/20070520_how_to_blur_faces_in_a_movie.html

     When you want to add extra Blur to a video clip in your Windows Movie Maker project you start the same way that you would when adding any video effect to your project. Select the clip you want to add extra Blur to in your Timeline and right click it. Once the pop up menu comes up go ahead and select Video Effects from the list. Once the Video Effects menu comes up go to the left hand column and find Blur, which is the top option right above Brightness, Decrease. Select Blur and hit the add button in the middle, bringing it to the right hand column and adding it to your clip. Now, if you want to add more Blur than is originally included by the single video effect add then you begin to add it again. What this does is then Blur the image again after the original Blur has been placed. You can do this as many times as you want until the level of Blur you want is on your Windows Movie Maker clip.
 

u can find what you want here:

http://www.brighthub.com/multimedia/video/articles/38749.aspx

Windows Movie Maker: Blurring Video Clips

http://www.brighthub.com/multimedia/video/articles/38749.aspx

Adding Blur