GTX275 might be the key to it. Motion blur works by averaging several consecutive frames. When you have 60 FPS it's fine, because frames are very close to each other to the blur is very slight, similar to standard fullscreen blur. On the other hand, when on my PC Arma2 gives ~20 fps, frames are three times more jumpy than with 60 FPS, so motion blur averages three completely different frames giving you very bad result image.