At my previous company, we provided a hosted application that customers would integrate into their own websites. At times, they would use an IFrame to do this, fitting our hosted page into their existing designs. Sometimes this was even done seamlessly (ie. the IFrame had no borders or scrollbars, it just looked like part of the page). I considered this to be a good use of the tag.
They can be extremely useful in some circumstances, but those are limited. In particular embedding common functionality across multiple sites.
For example I have a client who runs a number of Scottish goods e-commerce sites. As part of this we have developed a couple of simple applications to locate possible clan names from your surname or your choice of tartans (giggle if you wish but tartans are worth $700 million a year to our economy). The database behind this is surprisingly large (nearly ten thousand rows in the core names and tartans tables) and fairly regularly updated.
So we have the applications set up to run on one website and then embedded these into our other websites using an iframe, enabling simple javascript parameter passing so we can integrate the selection of a tartan or clan with functionality on the embedding site. The iframe is set as noborder so it appears completely seamless to the end user.
Of course there would be other ways of doing this, but the use of an iframe is simple and robust. And it's certainly not obsolete.
In my opinion the W3C jumped the gun in dumping iframes from the Strict HTML and XHTML doctypes. In theory you would use the <object> element to add foreign objects to your document, but browser differences and limitations have made this a nonstarter for many developers. With the much-more-pragmatic HTML 5 (which is still a draft), iframes are back and even have two new attributes: seamless, and the intriguing sandbox.
Currently they are the only simple way to provide isolation for javascript apps that are pulled from multiple domains/providers.
Also many of the widgets that people embed on their websites from third-parties use iframes.
While they do have their drawbacks, iframes provide a pragmatic solution to common problems on the web. I'd have to guess that they will be around for some time to come.
I work for a company that used frames for everything from pull down menus, lists, content blocks, etc just to cover the intricacies of .net web forms. The application is very slow and only runs on IE. Don't do this.
Horses for courses... <iframe>s are like anything else... for the right purpose they're the right tool; for the wrong purpose they're an ugly hack, or worse.
In Ajax, <div>s are often the more appropriate container. In some places the activity of passing-off external content as part of your own site, as supported by <iframe>s, is inappropriate.
My team used an <iframe> the other day as an ideal way to give users access to their HTML e-mail history - the e-mails were complete <html> pages which we wanted to insert easily into our web template. <iframe>s were absolutely perfect for presenting that data]'.
On the other hand, <iframe>s should almost always be removed or disabled in any user-submitted content which is output back onto the site, because in that context they are a major security issue.
Compliance and Security issues can also drive you to use Iframes; Shopping carts are popular IFrame-based implementations when you want to visually incorporate a shopping cart as part of some web pages without taking on full responsibility for the payment processing side of things.
We commonly deliver an Iframe to integrate our eCommerce stuff and clients like how turnkey it can be.
I've seen lots of forums that suggest the Object tag as a replacement for IFrame, which probably works in most cases.
For example, I had a PDF showing in an IFrame (because there were other things we need to show on the page besides only the PDF) and was able to get it to display fine using Object.
<object id="confirmed_pdf" class="current_pdf" data="/prescriptions/show_pdf?id=123" type="application/pdf" height="570" width="480">
<p>[Show this message if displaying the PDF did not work]</p>
</object>
But Object was not a suitable replacement to fill the requirement to be able to print ONLY the PDF portion of the page.
An IFrame is like its own window within the page (a window within a window, basically), and once you get the window object, you can call .print() on it, like:
jQuery("#confirmed_pdf").contentWindow.print();
IFrame has a contentWindow property, that's what makes printing only that part possible. Object does not have a contentWindow property, so there's no way to print only the section of the page.
So, it seems like if you're just using IFrame to display something, there's other tags like Object that can be used instead. But if you need to interact with the contents of the IFrame in certain ways, then IFrame may be necessary.