How to "blur" an image

Is license plate moving or static? If moving, how many seconds? Either way you can't do in iMovie, you need Photoshop or AfterEffects. Some genius here may prove me wrong but I don't think any version of iMovie can do it, maybe FinalCut Express or FinalCut.

You can't "blur" the pixels, but you can drag another image onto the clip and select "Picture in Picture". Size the PIP to fit over the portion you want to blur. I would pick a neutral color slide for this.

Note: If the Picture in Picture does not work for you, go into iMovie/Preferences and put a check next to "Enable Advanced Tools"

Try a JPEG or a PNG file.