The concept is really simple, the work can either be easy or tedious depending on the shots.
Simply apply the "PAINT" effect (under IMAGE I believe) to your shot. Enter effects mode, select either the circle or rectangular selection tool and draw your shape over the item you desire to block out. Towards the top of the effect window will be a pulldown menu labeled "MODE", select either "BLUR" or "MOSAIC". Create keyframes as the shot moves and move your object as needed. You can adjust both the amount of blur/mosaic, and you can also feather the edges.
Some other tips. You can use the bezier system of control points to create irregular shapes. You can also do several blurred or mosaiced objects at the same time. You can also apply trackers to the objects. The other cool trick is that you can use the "ERASE" mode within the same effect to create an object that stays uncensored, think of a face walking behind a wall. "ERASE" the wall and as the blurred face moves behind the erased wall, the wall will stay sharp.
The possibilities are unlimited... but it can become very tedious depending on the movement of the objects on the screen, and how critical you want the defocused area to be.
I would read the help files on either the paint effect or animatte to get hints on using Bezier Curves and control points to modify your selection so that you can tweak the shape of your effect.
M. Scott Cole
Senior Post Production Editor
CBS News, NYC