The projected shell model is a shell model truncated in a deformed basis, i
n tills paper, we investigate how the effective interactions are related to
the truncation of the Hilbert space and how the deformed basis affects the
final diagonalization. We show that self-consistency conditions between th
e quadrupole force and the mean field deformation must be fulfilled in orde
r to reproduce experimental data. By a systematic study of the yrast band i
n Dy154-164 isotopes we show also that, in the context of the present model
, enlarging the mean field deformation by about 20% allows a very good desc
ription of the spectrum of yrast band in these isotopes. Finally, we demons
trate that the description of soft rare earth moments of inertia can be gre
atly improved if a triaxially deformed basis is used.