I can see why they put it there, it gives the menu a very surreal feel and sort of hides that there's not much geometry on the screen (under the fog, etc), and I understand that with the success of Halo 2, they are keeping the Halo 3 menu in line with the previous game (and I would imagine that they think it looks cool or something
), but from a pure OMGAWESOME standpoint, I prefer the non-blur version. It lets me really appreciate the detail that they've put into it, just watching as the camera pans around the environment. So I guess I don't really know what to think.
My two cents, ambiguous as ever.