Here's how it works:

Track 1: Normal video with cookie cutter effect
Track 2: Same video with blur added

You get the blur because the cookie cutter effect cuts a "hole" in the normal video allowing the blurred video on track 2 to show through.

Im still lost, this means you will have to do everthing twice?

Ahhh OK! Got it now~!

1 prob. Its really choppy when I playback what is with this? too much to load?

It depends on your computer and your preview level. Once you render, all will be fine.

could be
 

bump down to draft quality and if that doesn't help spend 4 hours de-fragging your system. If it still doesn't work, then chances are you system isn't going to be able to preview it.

jason