Here is a simple solution using a dynamically generated style sheet served up by the same server as the iframe content. Quite simply the style sheet "knows" what is in the iframe, and knows the dimensions to use to style the iframe. This gets around the same origin policy restrictions.
http://www.8degrees.co.nz/2010/06/09/dynamically-resize-an-iframe-depending-on-its-content/
So the supplied iframe code would have an accompanying style sheet like so...
<link href="http://your.site/path/to/css?contents_id=1234&dom_id=iframe_widget" rel="stylesheet" type="text/css" />
<iframe id="iframe_widget" src="http://your.site/path/to/content?content_id=1234" frameborder="0" width="100%" scrolling="no"></iframe>
This does require the server side logic being able to calculate the dimensions of the rendered content of the iframe.
