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I am facing problem when working with Google Earth imagery. When I am digitizing at 1:1000 it just shifts the shapefiles when I even pan the image. Checked for CRS and everything but it doesn't work for me.

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    Can you elaborate on the problem and provide a link to an image of the issue?
    – Radar
    Jun 7 '13 at 21:20
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You might be running into an well known Issue: http://hub.qgis.org/issues/6822

Please see this question:How to Digitize Free Satellite Imagery in QGIS - Alignment issues with Openlayers Plugin

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