I have seen IFRAMEs applied very successfully as an easy way to make dynamic context menus, but the target audience of that web-app was only Internet Explorer users.
I would say that it all depends on your requirements. If you wish to make sure your page works equally well on every browser, avoid IFRAMEs. If you are targeting a narrow and well-known audience (eg. on the local Intranet) and you see a benefit in using IFRAMEs then I would say it's OK to do so.