The smudge tool is located here on GIMP. It is used to blend images onto other images without a hard edge. The smudge tool can also be used in many diffrent ways for diffrent effects.
As you see here the smudge tool, if used incorrectly, can have varying results. If by chance you like the end result of just using the tool all over the area then by all means go with it, but if you find it does not look pleasing to the eye then try this.
Here I have used the smudge tool for a very subtle change to the "Y" to make it blend with the background more. Small diagonal swipes with the smudge tool along the border of your cropped in picture will cause it to blend nicely into the background.
Here I made the image focus in on the person rather than the now illegable text. The tiny bit of gradient adds a nice deathly feel to it. Smudge tool can be used to make images distorted out of focus but yet remain in the image, as does the blur tool. Unlike the blur tool however the smudge tool is used to more extremely focus a subject, create motion blur or blend a background and foreground.
Did ya get all that?