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The Ken Burns clips created by iMovie HD tend to play quite smoothly, so my guess is this is a playback problem, not a clip problem. Your Mac may have trouble playing the clip smoothly. That can occur for a variety reasons. (Playing movies is a very demanding task, where the Mac's processor speed, disk speed, RAM and video capabilities all affect the outcome.)
Reducing the size of the project window can help. Or choose Advanced > Show Full Video Resolution from the menubar. That sets the window to play at the movie's natural size, which requires less power.
One way to check a clip is to use the arrow keys to play the clip one frame at a time. If that plays smoothly — albeit slowly — the clip is okay.
You might also try opening the clip in QuickTime Player and playing it there. Double-click on the clip to open the Clip Info window. Note the file name. Then to access the file, Control-click on the iMovie project icon, choose "Show Package Contents" from the popUp menu, and look for the clip's source file in the Media folder. Double-click on the file to open it in QT Player and play it there. If it plays smoothly, everything is okay.
Sometimes quitting iMovie and re-opening the project can help it to play smoothly.
You might also consider setting iMovie preferences to lower the image quality a bit, which helps to play more smoothly.
I notice you are running Mac OS 10.3.9. Sometimes upgrading Mac OS X and QuickTime helps solve such problems. If these are working for you otherwise I wouldn't upgrade for this reason, but it might help.
Karl
