This is part one of my filter effects tutorials, where I'll describe the filter effects existing in Inkscape and general information about using and creating filter effects.
The blend filter composites two images pixel by pixel. It provides four compositing modes common in raster graphics editors: multiply, screen, darken and lighten. Also, it can be used to do the normal alpha compositing used in SVG.
Blend is also other one of the filters, that can be used without going to filter effects dialog in Inkscape: it is used to provide the layer blending modes.
The different blending modes work as follows:
Multiply: works like mixing pigments. Magenta and yellow make red, red and cyan make black etc.
Screen: works like mixing lights. Red and blue make magenta, magenta and green make white etc.
Darken: works like normal compositing, but composites both first image on top of second and second image on top of first and takes the darker result for each pixel and each colour channel, efficiently making the resulting image darker than either of source images.
Lighten: like darken, but takes the lighter results.
For multiply and screen, the following image might explain this better than I can:
On left: red, green and blue (RGB) circles composited with Screen.
On right: cyan, magenta and yellow circles (CMY) composited with Multiply.
For more complex effects, blend can be a handy tool when collecting several parts of the filter effects chain together.
There are a couple gotchas with blend filter in Inkscape and in general:
First, while Inkscape provides you with layer blending modes, such a concept doesn't actually exist in SVG 1.1. When you specify a layer blending mode, Inkscape creates a blend filter, that takes everything with lower z-index as your layer and composites that with your layer contents. This is the filter result. The filter result is then composited on the canvas, on top of everything with lower z-index. If your drawing has a solid background, this is just fine. If the background is not solid, it will be drawn twice. You may end up with funny looking results like in the following image:
On the top, over solid white background, everything works just fine. But on the bottom over transparent background, you can see a box appearing around the small star.
The other gotcha is the enable-background property. If you want to use background image as part of any filter, that property must be set. Some parent node of the object, you are applying the filter to, has to have this so that SVG renderers know, what part of background you want to use for compositing. This only applies to hand-made filter effects, if you use the layer blending mode combo box, Inkscape will take care of setting this property for you. For now, the easiest way to set enable-background so that you can use background in your filters, is to set some blending mode from layers palette.