I have been reading up on this, and it seems that if you use ajax you can only bring in content that resides on the same domain whereas with an iframe you can bring in content from any domain. Is that the case? What other differences are there?
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2Bear in mind they're two completely separate technologies.
A (i)frame really loads a complete HTML page in area into the browser. Whether the page is on the same or another domain, for pure viewing, doesn't matter.
Ajax only describes a system to facilitate JavaScript to talk with (and with current security restriction across browser, only with) the server from which you document within which you generated the JavaScript call from.
The (i)frame technology loads and renders a complete HTML page from any URL given. Certain security restrictions accessing other documents from other domains with JavaScript still apply.
With Ajax, it's only meant to use purely JavaScript to talk to the originating server (send some data) and usually get some data back. In JavaScript. What this data is and what you do with it, is up to you. Whether you insert it into the DOM (Document Object Model), exchange parts or load a new page is up to you.
To a certain degree you have all freedom you want. You can have an (i)frame on a page, still make a Ajax call and decide to load another URL into the (i)frame. Or use the Ajax return value to generate new HTML dynamically inside the (i)frame. Or outside, in another document.
The security restrictions applying in this case is called "same origin policy".
Quite simply, an iframe is like a regular frame, but it doesn't split the browser window up into sections, it sits right inside a page and is affected by the scrollbar.
Ajax, on the other hand, uses javascript to do partial loads of a page, allowing small amounts of data to be loaded from the server without needing to do a complete postback. For example, Youtube uses Ajax when you post comments, vote, queue videos to play, etc. They do this so that your video isn't interrupted and restarted by a complete page postback.