There is a way to do a smear or blur, but Vegas does not have the tracking feature. You would have to program that yourself using motion and position keyframes.
I think it really depends on what you want to blur and how big the blemish is on screen. Photoshop CS3 will let you import video and rotoscope on it, using their blur tool - really cool for this kind of thing but you're stuck either way doing something frame by frame to conceal the blemish.
Hopefully it's not a moley mole like the principal had in Uncle Buck ;)
There are programs that can do automatic feature recognition and tracking, enabling all kinds of fancy effects. One of the least expensive, but still very powerful is "SynthEyes" starting at US$400. http://www.ssontech.com/synovu.htm
Boris FX 9 has a nice motion tracker along with a lot of other great tools and FX. Vegas users get a discount if you have the LTD version which was offered with Vegas 6 or 7 (I forget which). Boris FX is also on sale for 50% off at DigitalJuice ($149 USD). Otherwise you need to manually keyframe to track the motion yourself. Personally I'd pick up a copy of Boris FX since it does image stabilization, motion tracking, corner pinning, particles, keys and mattes, and tons of other FX. Well worth having in your kit for the 50% price.
Is the image stabiliser feature in Boris FX as good as the one in Boris Red or is the difference between these two more in the quantity of features rather than the quality of the individual features?