Sadia, this is called Thematic Apperception Test. Google this term and you will get plenty of pictures that are used in this test.

The pictures are not blurred. They are pencil sketches so the ground is black and white.

Yes, we are given a booklet (I assume separate for each competitor, or at least the order is changed). There were three stories as far as I remember in CE-2010. Instructions are given before the start of test. We are taught to be as imaginative as possible. We are also taught to think along the lines that led to that event and what happened after that. Five minutes for each story. The psychoanalyst is able to grasp your meaning even if you think you left the story incomplete. Not a big deal.

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