The iFrame was a Microsoft creation. It is not a part of the W3C standard. I believe it was first introduced as part of IE5. When it was first introduced, you could only use iFrames in IE, other browsers did not support it.
since it is not a standard part of the HTML specification, you will get mixed results across browsers. Since it is an element created by Microsoft for IE, I would say the IE behavior is correct. This is a rare instance where FireFox is not implementing the element correctly.