A: 

As far as I know it cannot be done. Why not use an XHR request and populate a div instead?

eyelidlessness
That's what we're doing currently, but -- as mentioned above -- one of the requirements is to allow 3rd party sites to drop-in the IFRAME as a widget on their pages. The current implementation is also freeziing up the UI, but I'm confident I can work around that.
Andrew Hedges
You can simply specify an XHR API and allow others to plug into it however they deem appropriate (also allowing them, of course, to disable your scripting, but so be it).
eyelidlessness
That would only be safe if you actually trust the content/widget -- an advantage of iframes is that they effectively sandbox content (courtesy of the same origin policy)
olliej
Also, some of the 3rd party sites are run by people who are quite non-technical, so we were hoping to do a drop-in solution for them (in addition to our API for more sophisticated users).
Andrew Hedges
+10  A: 

No it's not possible. Ignoring any historical reasons, nowadays it would be considered a security vulnerability -- eg. many sites put untrusted content into iframes (the iframe source being a different origin so cannot modify the parent frame, per the same origin policy).

If such untrusted content had a mechanism to place content outside of the bounds of the iframe it could (for example) place an "identical" login div (or whatever) over a parent frame's real login fields, and could thus steal username/password information. Which would suck.

olliej
+1  A: 

This may be off the mark either because it's unsuitable in light of your requirements, or it may not actually help (!), but it might be worth checking out UFrame. It's a kind of hybrid of iframe and div, and could probably be packaged up as a widget (your best bet would be to give clients a <script> tag which would suck in UFrame and the relevant markup). What I'm not sure about is whether you can achieve the overlay you require, but it's possibly worth a play around with. Sorry I can't be more specific but it's not something I've actually used myself, I just bookmarked it a while back for future reference.

Luke Bennett
A: 

if you know the absolute top of value that tool top can have you can create a div that is the height of the content + the highest distance the tool tip will display in. Align the iframe to the bottom of the div. make sure the iframe and div are transparent. then the iframe content with the tool tip should display. Though this is setting your self up for the headache of making sure stuff like highlighting work the same in all browsers.

gltovar