I believe the KWin developers use the proprietary drivers on their systems. The effects are written in OpenGL however, which all graphics cards and drivers can handle (just to varying degrees of success)

There's a way of making the blur effect a lot faster and efficient. Open compiz-config and for the blur plugin select Mipmap LOD, instead of Gaussian.

Oh yeah, that's Compiz. For Kwin the solution is much simpler: turn off the effect. Ah, don't bother asking the developers to implement that feature, they are so happy with blur as it is now that they won't even accept patches. See Bug #194109 for more details.