I have a website which sometimes calls
php files inside iframes, now I
wouldn't like it if somebody copied
that code, so how would I hide it? Or
do I have to encrypt it?
No, that makes no sense and would not work. You have to realize that the PHP code is executed on your server to serve a HTTP request, and that the iframe results in a separate HTTP request from the main page.
If you want to prevent others from including the iframe in their own page, you could check the referrer header and have the iframe page show an error if the referrer is not from your site, but that could cause problems for some legimitate users and can also be circumvented.
Alternative solution: do not use iframes; instead, integrate the PHP code that currently displays the iframe's content in your main page. This will work for all users and cannot be circumvented.
Of course, you still can't prevent others from requesting your page, extracting the content from the HTML and displaying it on their page - that's just how the internet works.