made a quick demo yesterday that actually does what your talking about. http://bit.ly/10clOM9 this demo does the parallax based on the accelerometer so it works best on an iPhone itself. I basically just copy the content we are overlaying into a fixed position element that gets blurred.
note: swipe up to see the panel.
(i used horrible css id's but you get the idea)
#frost{
position: fixed;
bottom: 0;
left:0;
width: 100%;
height: 100px;
overflow: hidden;
-webkit-transition: all .5s;
}
#background2{
-webkit-filter: blur(15px) brightness(.2);
}
#content2fixed{
position: fixed;
bottom: 9px;
left: 9px;
-webkit-filter: blur(10px);
}