You please refer to any finite element book to understand the difference between membrane, plate and shell elements.

ETABS permits you to use shell element to model the walls. Using the stiffness reduction options one can simulate only the membrane action of the walls.

Thanks Prascad.
I understand the difference between membrane, plate and shell. What confuses me is that ETABS USER MANUAL says the software allows a user to simulate shear wall with line object as well as area object. What's the function of these line objects in a wall element?

ETABS allows you to model shear walls using either shell elements or frame/line objects. The wall area object can be membrane only or shell type.

ETABS shell and membrane elements have the addition of incompatible modes to avoid shear locking problems found in traditional shell elements used by some other structural programs. This enables ETABS shell/membrane to handle both in-plane shear and bending deformations needed for shear walls

Having said that, it is possible (maybe preferable?) to use frame/line elements to create a shear wall model which accurately captures the  behavior of the wall. The only disadvantage that I can see to using frame/line elements, is the necessity to use constraints to rigidly link sections when there are openings in the wall.

One more point - if shell elements are used with a very fine mesh, the linear finite element solution may provide unrealistically high stresses at the corners of openings

Thanks barefoot_hillbilly.
According to ETABS USER'S MANUAL wall element can be constructed by shell element and frame element together.
As far as I can see, using shell element can simulate both the in-plane and out-of-plane stiffness of shear wall. Why should I use frame elements simultaneously?

Normally I use shell elements to model walls. I do not remember if etabs had mentioned anywhere in the manual on the use of frame elements to model the walls.

If it is there it must be a modeling option provided to the user. For example consider a situation where in you have a column very near to shear wall which is connected to the wall by a stiff beam in the lower floors . And at upper levels the wall and column are wide apart. But it is upto the user to decide what kind of modeling approach closely represents the reality.

From the design point of view we need to look at the PIER and SPANDREL definitions in etabs. Some times we provide a commmon pile cap to the shear walls and columns very close to the wall. Assignment of the same pier label to the walls and columns at the ground level will help us getting the combined design forces for the pile cap and foundation design.

I second Prascad's advice that it is up to the engineer to decide which approach most closely represents reality.
Although Etabs does allow you to assign pier or spandrel labels to line/frame elements, I find using area/shell elements is usually more convenient for shear walls. In order to mix walls modeled with line/frame elements with walls modeled with shell/area elements, you would need to spend time using rigid links to transfer forces/moments between element types.

When assigning a common Pier label to multiple shell elements for design, ETABS integrates the stresses across all Pier elements with same label to provide top and bottom forces/moments as well as top & bottom steel requirements as if all the pier shell elements with same label were 1 column. Same concept with Spandrel label, but steel is designed for left and right stations.

In the use of the finite element analysis the most time consuming task is usually the creation and modification of the finite element mesh of the system. In the object-based environment of ETABS the Structural Engineer only has to create the few large objects that represent the physical wall panels and openings and does not explicitly create a finite element mesh and associated elements. The finite element analytical model is created automatically using parameters assigned by the Engineer as internal properties of the objects.

In ETABS, mesh compatibility between adjacent objects is enforced via automated line constraints that eliminate the need for the user to worry about mesh transitioning for mismatching meshes at interfaces of adjacent objects. These displacement interpolating line constraints are automatically created as part of the finite element analytical model at intersections of objects where mismatched mesh geometries are discovered.

The same object based technology is equally applicable to floor slabs, thereby allowing the user to create finite element models of complete 3-D building systems. Whole floor plates are modeled as single multinoded Area Objects and Opening objects have been placed over floor objects to punch holes. The finite element mesh is defined by properties that are assigned to the objects.  Line Constraints automatically appear at interfaces of intersecting floor and wall objects to enforce displacement compatibility when mesh geometries do not match.

What makes this technology really powerful is that while making modifications to the model the Engineer need only be concerned about the few large physical objects of the structure. The modified finite element analytical model gets recreated automatically with any changes to the base objects.

barefoot hillybilly has just quoted the textbook by wilson..verbatim!!