AlexK, I'm not sure that's a great blurred text readability demonstration.
I believe that in art it's called negative space illustrations. They do demonstrate some of the power of the mind to interpret visual information, that many people are not aware of.
In the past I've seen nice demonstrations where you presented with each word as a block. The block is only a outline of the all the letters, running from the top of one letter to the top of the next. All the white space between the and within the letters is filled in. It's amazing how well your concious mind can read the material. Many words are easy, all on there own. Others you can figure out because of context and semantics.
