Inverse of Censor

Can somebody please advice me how to create a highlighted spot, like the reverse of Censor with blur outside the oval/rectangle?

Try the Local Focus effect.

Thanks, but on Videopad Professional 8.99 that I am using, Local Focus is not in the supplied Video Effects.

With 8.99 your best bet may be something along these lines...

On track 2, draw a OUTSIDE mask, then add the TRANSPARENCY effect. Place the same image on track one and use the BLUR effect.

Better still, install the latest release. Even if it's unlicensed, Local Focus may be available during the trial period.