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Here is what you need to do:
1) Go to the Blur Windows settings in the CompizConfig Settings Manager.
- Set which windows you want this to apply to in the "Alpha blur windows" section. I just copy/pasted all the windows from the "Focus blur windows" box. I then disabled Focus blur and enabled Alpha blur. Tweak other settings to your liking.
2) Run gconf-editor (either from terminal or from app launcher).
- Navigate to /apps/gwd/blur_type and set it either "titlebar" or "all". From what I understand, either only the titlebar will be blurred, or all the window borders.
Now the window borders should be nicely blurry, like this:
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Source: UbuntuForums