Shaky lines relate to resolution 1080p? How to go to 720p?
Can you describe what you mean by "shaky lines". You should not be getting shaky lines or any other issues from 1080p. Possibly you might get the shimmering artifacts of interlacing from a 1080i clip, but not sure.
The first thing to try is to delete preferences and see if that cures it. To delete preferences, open iMovie while holding down the Option and Command keys and select to delete preferences in the box that appears. iMovie will open in a new library. Reopen your old library to get back to your projects. Deleting preferences is a safe procedure that will not cause data loss or disruption to your project.
To change the project to 720p, create a new project and insert a known 720p video (not photo) into the project as the first clip added to the project. That will set the project at 720p. You can then delete the first clip and the project will still remain at 720p. When you export the project you probably will have 720p and 1080p share options, and you can select the one that you want. Since it is a 720p project probably 720p would be the appropriate selections.
Shimmering artifact is accurate description. It is a photograph slideshow and I did find that I was seeing it in the preview box while adjusting the cropping for Ken Burns effect. When I played the slideshow full screen it seemed to go away. Years ago I got the shimmering more from the higher resolution movies I made from slideshows which is why I was trying to reduce to 720p. Thanks for your help.
Double check to see if your clip might be 1080i rather than 1080p. If so, I believe that Handbrake can deinterlace it.