Photoshop still photos look extremely grainy in iMovie '08

I'm making a photo slideshow DVD for a wedding using iMovie '08. The photographer asked me to include his photos he made with Photoshop. Some of the photos have effects on them. Other photos still look grainy even though they don't seem to have any effects on them. I promise I'm not being picky. You can barely see their faces on some of the photos. All of them look outright crappy. In iPhoto they look great. They range from 3 MB to 7 MB and have a size of 3522 × 2348.
I exported the project as a large movie to see if they looked better once they were exported (instead of just in the viewer), but they look the same.
Any ideas?

To expand on QTKirk's thoughts... Your large images are scaled to a maximum HD project height of 1080 with corresponding width to maintain your original aspect ratio. These scaled images are then stored in the project as individual frames in a movie file named "Still Images" which you can check if you open the project package. So it does not matter whether you pre-scale your photos externally. In addition, anything burned to DVD, as QTKirk said, is again re-scaled to 640x480 standard or 853x480 widescreen (NTSC square pixels) and encoded as a 720x480 data matrix with the appropriate aspect flag set for burning.
In any case, was thrown by your "I'm not being picky" comment and may have been looking too deeply for an alternative cause of the problem in your case. Have to admit that Kirk's answer does seem to be the most logical but does rely on individual perceptions of quality which I was trying to "get around."

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