Basically once you are beyond 2-3x the focal length blur is no longer captured. With VR on, it re-centers elements while the shutter is moving causing false blur.
Nyquist by Thom
"Nyquist tells us that we can only really resolve data accurately below half the sampling frequency, thus it can accurately only take out movements as small as 500Hz (1/500 second). While this sampling frequency is of the camera motion, it is not completely uncorrelated with shutter speed. For example, the shutter curtains only travel across the sensor at speeds above 1/250, exposing only a portion of the image at a time. Another aspect of the VR system is that it "recenters" the moving element(s) just prior to the shutter opening. Simply put, there's a lot that has to be right at very short shutter speeds in order for there not to be a small visual impact, especially with long lenses." http://www.bythom.com/nikon-vr.htm
