It's a lot easier than the first post, since in this we can actually program it in JAVA and load a .jar. The first thing to deal with is to get the frame before the render target renders it to the window, and use various methods to edit the frame appropriately and send it back to the render target to be rendered to the window.
You think you know how to do this? I don't quite know how many .getParent()s we might need before we get the frame. Perhaps we can take a look into the Video Recorder method.
In making a GUI you can simply paste an image in front of the render target. An important thing to note is whether or not we want the image to resize with the window or not.
http://www.jhlabs.com/ip/blurring.html
Is a good website for learning basics for blurring still images. Still, we want to program our blurring algorithm that we can do it at least 60 times a second for realtime blurring.