Some tips for using blur in Inkscape SVN:
0. Use the Blur slider in the Fill and Stroke dialog. You can blur anything - paths, shapes, strokes, calligraphy, bitmaps, text, clones, groups.
1. Currently, the maximum blur radius is 10% of the object size. Any larger blur will reveal the clear-cut margins - the blurred object cannot (currently) spread wider than the 10%. However it's easy to work around this limitation: group the object that you want to blur with some large fully-transparent object, thus making the group larger than the object, and blur the group.
2. Objects that store their transformation matrices (texts, groups, shapes, but not paths - unless you set "Store transforms" to "Preserved"), when scaled, scale also the blur applied to them. This means you can squeeze an object and its blur will be bigger in one dimension than the other. (It's also possible to do that by setting different blur radii for X and Y, but we don't yet have UI for that, though it works if you set it manually.)
3. You can combine blurring with gradients. For example, an ellipse with elliptic opacity gradient will look much softer and more natural when blurred. An object with a horizontal linear opacity gradient, when blurred, will look like it is more blurred on its transparent side than on its opaque side.
4. Masks and clipping are applied AFTER blur. That is, if you clip an object and then blur it (or blur it first and then clip - it makes no difference), the clipped edges will remain crisp. Often, this is what you want. If, however, you want to blur the clipped/masked edges too (possibly with a different radius), you can use grouping: group the clipped object with some other object (which you can then delete from the group) and blur the group.
5. A recipe for an autoupdating black drop shadow for object of any color: create object; unset its fill (it becomes black); create two clones of it; put one clone on top and paint any color; put the other color at bottom, blur it and shift sideways. Now you can edit the unset-fill original (use Alt+click to select it) and everything will update. Obviously, if you want a drop shadow of the same color as the object itself, just one clone for the shadow will suffice.
6. If an object has a fill that you don't want to blur (e.g. pattern, or if it's a bitmap), but you want to feather its edges, use blurred transparency mask: copy the object; paint it white; blur it as needed; scale the blurred copy down so its blur margins are entirely within the original object; select both the original and the blurred mask; do Object > Mask > Set.
7. You can use the Tile Clones dialog to create patterns of variously blurred clones - either with smooth variation of the blur per row/column, or/and with randomized blurring.