To add the blur effect you will need CompizConfig Settings Manager (CCSM).
This tutorial assumes you are using Ubuntu/Debian or a derivative of the two with the Gnome Desktop Environment.
It appears that blur isn't playing well with F/LOSS drivers for graphic cards. It works on Nvidia cards with proprietary drivers. If you have something to add to this section please do so.
Cards known NOT to work at all or very slowly:
- Intel GMA 915
- Intel GMA 950
- Intel GMA 965
- ATI FireGL 52xx with open source radeon drivers
Open the terminal by going to Applications --> Accessories --> Terminal . Paste this into it an press enter, enter your password when prompted.
sudo apt-get install compizconfig-settings-manager
Activating the Blur plugin and add Docky to the list of stuff that needs to be blurred
CCSM is now in System --> Preferences --> CompizConfig Settings Manager
Start it and find the Blur Windows plugin. Activate it by marking the check box next to it.
After that click on it to set Blur settings.
You need to activate Alpha Blur Windows and add Docky to the list of apps that should be blurred. Here is how my list looks:
After you're finished exit CCSM.
And that is it. You should know have Docky with blurred background.