Hi
Using version 5.02 the Motion Blur works fine here and It is visible in both Preview and Sequence.panes, (In fact it is the same clip, split in the middle with the effect applied to one of the two sections.) The change between the treated section and the untreated one is obvious.
Check the clip you are using. A lot depends on the speed of the subject and the level of blur applied. Low levels may not be too noticable as would be the case of slow subject movement. (Obviously it won't work on static images. :-) )
Try it out with a clip of something moving quite fast across the field of view and blur set to 800
Nat