This happens when the DV camera captures interlaced videos. If you use an interlaced video in the Timeline, you will also get it in the created movie. Many DV cameras now have a progressive-scan mode that captures de-interlaced videos.

One way to minimize interlacing is to keep the project and the final movie's width and height same as that of the DV video you have added to the Timeline. By default, any new project will take the width and height of the first video that you add to the Timeline. Simply create a new project and add the DV video to the Timeline. Next, in Make Movie make sure that you select the same width and height as that of the DV video.