Photoshop, Premiere Pro, After Effects. Pick one.
In ADDITION to animating a blur, you might also want to look at animating AE's good ol' Mosaic effect.... not too much of it.
After Effects will certainly allow you to generate animated blurs.
But plenty of other tools might be better options.
Premiere Pro will allow you to do it in much the same way as After Effects. But you could also use PPro as the output tool, playing your pics straight off the timeline, using the spacebar to pause between photos.
Flash will allow you to create the blurs with interactivity, so the pics automatically pause until you hit a key to move to the next pic.
Personally, I'd probably just use Apple Keynote, which allows you to create a presentation directly, with predifined transitions including blur. It'd take a few minutes to set up the show, and would be very easy to play out at your event. But not much use if you don't use a Mac.
Powerpoint doesn't have an animateable blur, as far as I can tell.