Oh my god, that guys stuff is reminiscent of an Osama Bin Laden video.
Debstar, to easily understand the prism reverse spectrum "paradox" please take a look at the two figures I have attached.
In the first figure we have just the light source(s) the prism and the screen. Instead of just one source we have a number of sources arranged in a "T" shape so that we can detect the up/down orientation of the image as a whole. Without a lens of course there won't be a sharp focused image, but if the light sources are very directional then you will get roughly the image as shown (with blue displaced toward the wide end of the prism as expected). BTW, I made these figures quick and nasty by just showing red and blue, obviously you can fill in the other colors in between.
The eye (or camera etc) does
not work like the above. Here we require a sharp image even if the light is not already focused into narrow beams, here we require a lens. We can't avoid the lens when viewing this, it's built into our eyes so there's no way around this. We will
not see the image as shown above when viewing the prism directly, we must see as per what's shown in the second figure.
In the second figure I have shown the same experiment but with the inclusion of a lens before the image is projected onto the screen (or the retina in the case of viewing this directly with the eye). Notice something VERY important about this result. The image is inverted (this is common knowledge ok, a lens always does this) but what is interesting is that the red-blue shifting is
NOT inverted, blue is still displaced toward the wide end of the prism. You can prove this easily enough by simple ray tracing, or alternatively you could say that this occurs because the lens corrects for the multi-path divergent light rays from the source (which is what it's designed to do and which produces a focused inverted image) but it doesn't correct for the red-blue shifting caused by the prism (as the lens is not designed to do this). In any case we have the situation that
relative to the orientation of the image we now have the
opposite orientation of the red-blue shift. Of course the eye (and camera's and all other optical equipment* which uses lenses) invert the image a second times so that we see it the right way up – and this of course means that we will see the red-blue shifting the wrong way. Honestly that's all there is to this so call paradox.
*Note. The eye inverts the image simply by the way it's wired to the brain, otherwise we'd all see everything upside down. A simple film camera for example has the film loaded into the camera upside down relative to it's orientation when developed. Binoculars and terrestrial telescopes use a series of 90 degree reflections to right the image. Only astronomical telescopes usually leave the image inverted.
I hope that helps. :)