The transition parameters are added so that the animation is smoothened out. CSS3.info has a good article on how transitions work.
The setInterval function basically calls a function that we pass (first parameter), at fixed time intervals (second parameter). So in the script above, the code snippet executes every 200 milliseconds.
A very crude random decision maker; decides whether to blur or not. This gives a nice effect that retains the sharp image for longer and prevents from flickering the text too much. Once a decision is made to blur a random shadow-spread value in the range of 1 to 10 is generated and passed on with the necessary prefixes as a CSS attribute to the DOM element that we need to get to flicker.