I found another way to make the iframe transparent.
This link tells you how to do it
http://www.toxiclab.org/tutorial.asp?ID=51
In short, you just need to add
allowtransparency="true"
to the iframe
If you double click on the iframe, it should look something like this
<iframe id="$NAME" name="$NAME" src="$FILE" width="$WIDTH" height="$HEIGHT" frameborder="0" marginwidth="0" marginheight="0" allowtransparency="true"></iframe>
Then in the iframe page itself, edit the Main Page settings and select the Scripts/Events tab and under Header Code you enter
<style type="text/css">
Body { Background: transparent; }
</style>
