Y'know what's a good way to have dithers blend, even on screens that can easily display twice as many pixels without blurring them? Because yes folks, a screen that can show colorful 640px wide text without losing legibility must be able to show equally colorful 320px graphics without blending.
That'd be temporal dithering. Switch from 0101 to 1010 and back as fast as you can. Street Fighter Alpha 3 did that to do semi-transparency and it works well enough -- if the screen draws too fast to blur two pixels next to each other together, let the viewer's eyes blur two pixels after one another instead! It works so well, a modern 1920x1080 LCD screen showing SFA3 stretched out with no filters manages to give the right effect, so you know the size of the pixels doesn't matter any more.
