One of the largest pain points with inline visualforce pages is that the height is static even though the content may be dynamic. The response from salesforce.com has been:

"As for iframes, they do not provide a "dynamic height" capability natively. If the domain of the page that served the iframe is the same as that of the page that is embedded in the iframe then you can write script that resizes the frame to fit the contents but this is something that is not possible for Visualforce pages since they are now served from force.com."

Well....I tried this and it now works. I added this inline page to a layout and in the settings set the height to 15px. Once loaded it dynamically adjusts the height based on the content. So far I have tested with FF3 and IE6, works on both.

<apex:page standardcontroller="Opportunity">
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<script type="text/javascript">
resizeIframe();
function resizeIframe() {
var me = window.name;

if (me){
var iframes = parent.document.getElementsByName(me);
if (iframes && iframes.length == 1) {
var height = document.body.scrollHeight;
iframes[0].style.height = height + "px";
}
}
}
</script>
</apex:page>