tedster - 8:48 pm on Jul 7, 2010 (gmt 0)
Iframes have caused occasional problems in the past. There was one case in 2008 that was discussed on Google's forums - and Matt Cutts described this situation:
Essentially, our search algorithm saw a large area on the blog that was due to an IFRAME included from another site and that looked spammy to our automatic classifier. I believe that this bug has been fixed now. We also added additional safety checks to the relevant system that would escalate to an engineer if this site had the same issue in the future.
Another thread here, also relevant to the topic: Does iFrame impact Google SERP [webmasterworld.com]