I'm using Vegas and have been doing so for ages but I'm not sure about how to make an effect like this with that software, as I never tried it. However, I think you can use radial blur with a fixed radius and a weaker strength, it'll blur the rim(s) and the surrounding area. How large of the surrounding area depends on the value you enter in strength.
Without any plugins:
1. google for masking tutorials
2. without "preview selections" (talking about let's say onboard cameras):
Create a simple mask (e.g. in PS or any other picture editing software) in white/black (doesn't really matter) for the areas you want to blur. now place this mask "over" your video track (one which contains the actual footage), select blending mode (in vegas there's a "+" little button for changing it, in premiere it's in effects/channel/blend) to what suits your mask (e.g. for a white mask in premiere, select "darken only" and blend with original layer to 0). Now you have the footage and the white mask blending to that layer/video track, all you have to do is apply the blur on the mask. Your only job is now to apply the blur (radial/zoom in this case) as you want.
3. hurray'ing
Result (different from the example, but exactly the same method)
(note: this was only a test, so it's kinda not really proper, even the mask would need some finetune, but you can get the idea.)
(attached 2 pictures, 1 with the actualy footage, the other is an example for the mask.)
Pretty sure there are many more ways to do it, and quite sure there are at least a few which is easier, but this works too.
P.s.: not exactly a solution for the actual question, that can be solved the similar way, just more work when the camera is not fixed.
I didnt want to make a new thread, and im sure it has been asked 1030 times before, but why does LFS respond so badly to FRAPS? i can record Crysis, CoD4, rFactor and everything perfectly without FPS rate drops, but LFS just goes nuts! and makes it impossible! can anyone help? Thanks
'hijacking' a thread with a question that's not relevant to the topic at hand isn't the right thing to do either.. use the search and if you can't find it even after that, start a new thread.
/rant
Anyway.. i've been wondering about this too as LFS isn't able to do motion blur itself (not yet atleast i hope). Good to see people who know more about it are here to help out
nah Sam, it's not that... I saw the video, and it even got stopped for some seconds while the camera was moving and the wheels kept like that... it gave a great effect :P