Do you mean fade out and fade in?? I haven't come across a VDub filter for that. Anyway you could try looking here - http://neuron2.net/ (Search among "Mine", "Hosted" and "Other" in the left hand menu)
If you meant using the default filter, remember VDub is a linear editor. So, mark in and mark out the section you want to blur. Save it as a separate AVI. Open this new AVI, use Video > Filters > Blur, apply amount of blurring as desired. Save AVI by selecting the exact same codec. Open the original (first section), open the blurred end section using "Append AVI", save again. Not easy I know, so you'd be better of with non-linear editors.
I use Vegas Video for this sort of stuff regularly. But be aware, it's pretty expensive and you may not be ablse to justify costs for home use. I think a demo is available.