The blurring is actually a result of the physically high response time on the LCD in regards to contrast levels, and so
it won't show up in digital screenshots, you'd need images of the actual screen. So I did a video.
Video file:
http://www.mediafire.com/?vya3jy52dm57lwq
I chose Super Mario Land 2: The Six Golden Coins for this test on some RIN version as I had it handy and am familiar with it and it has relatively fast movement. I spent a few seconds moving back and forth in an area with blocks so that the difference between the lighter and darker blocks can be seen, as well as a few other tasks. The non-intertwined frames in my converted recording show the difference between how various colors are changed in the still frames and general movement.
There's an obvious struggle with dark-to-mid colors (low contrast), while high contrast changes are much more vivid and less blurry.
Assuming that the first frame is #0 like Virtualdub marks it...
#93
You can see here that the boxes I have already hit with the darker colors blur far more during movement then the left boxes that have a lighter base and thus higher contrast.
#94
One recorded frame later, the darker boxes show up clearer, because the pixels have had more time to respond to the change. No change in the light boxes since they already finished their transition in the previous frame.
#290
Faster movement here, you can see that the light boxes and Mario himself are blurred a bit, but it's nothing compared to the dark boxes.
#425
Mario and the background tree seem fine, but the border/edge of the terrain is made of pixels with low contrast to each other (dark grey fill with a black outline for the border), which noticeably blurs
into itself and not into the surrounding lighter terrain (you can still make out the "spikes" of grass on the inside of the mound of earth).
#554
After going down a pipe, there's trails on the edges, which had a bunch of a dark color together in the line of movement. Notice there's no trail on the lip of the pipe, as it's not a dark mass.
#728
Going back up the pipe, even in a frame that has an afterimage due to the out-of-sync recording speed of the camera, you can see the trails are
physically still left on the PSP's screen.
#797
I hit one question block out of a line, turning it into a dark block. Notice that it's blurred way more heavily than the question blocks.
#887
All dark? All blurred, the 2000's screen commands it!
It does have GBA support though.. they just are not actually using it yet.
It's emulation, which is the same way that the Wii plays N64, SNES, and NES games. This is different from the ability to play the actual game carts/discs you already own.