I have an image which is positioned at (x=0, y=177, scaleW=1.0, scaleH=1.0) at say $t_0$, and I need it to be positioned at (x=35, y=110, scaleW=0.65, scaleH=0.65) at $t_1$. How do I find keyframes in between, what kind of interpolation should I choose?
scaleW and scaleH denote scaling of the image along the X and Y axis, respectively.
You can scale each parameter linearly. The linear interpolation between $f(t_0)=f_0$ and $f(t_1)=f_1$ is
$$f(t)=f_0+\frac{t-t_0}{t_1-t_0}(f_1-f_0)\;.$$
Thus, for example, the interpolation for $y$ would be
$$y(t)=177+\frac{t-t_0}{t_1-t_0}(110-177)\;.$$