Hi there. Here are my guess as to what might be troubling you.
First
-what happens is, i bring the photos into my timeline, they look great, when i play the timeline, they loose their sharpness. They don’t become pixelated, just lose that snap of an in focus shot.
If you are working in a miniDV sequence on a high resolution monitor the miniDV compression could be what you percieve as image softness.
Second
http://www.kenstone.net has some wonderful FCP tutorials and white papers. I think they might have one on the “Ken Burns” effect.
Third
FCP just isn’t as good as Photoshop for rescaling images. If you are going to rescale an image in either app it is important that it be a much higher resolution than normal. My usual guestimate is that you need at least twice the final desired resolution. So if you are going to resize an image to say 640×480 you would need to start with an image at least 1280×960.
If any of this is too basic I appologize. And if any one disagrees please let me know.
Good luck
Matt