I have been running 7 Moultrie I-40's since last year. I upgraded the software last season when it came out and have not had 1 problem with any of them since.
I do not experience the blurred pictures seen above withany of my cameras, so it must be anissuewithin your camera itself.
Don't give up on the I-40 just yet. I find it to be the best camera for the moneyon the market today, and I have tried many of them. I average about 4 months per set of batteries at about 150 pictures a week on average, and picture quality is great.