Why do revs drop considerably on a 740 1989 estate when ticking over and when reversing but not when the car is driving over 1200 RPM?

If you are referring to the RPM riseing and falling by itself (Hunting) you might want to check to see if the intake is clean. I have had problems with my 740 not wanting to idle when the throttle valve area is coated in oil and grime. After using an approved spray cleaner it idled correctly.