Adding a border to an IFrame is no biggie - you do it like this e.g.:
border: 4px solid #000; -moz-border-radius: 15px; border-radius: 15px; >
border: 4px solid #000; -moz-border-radius: 15px; border-radius: 15px;
You could use the Malsap jQuery rouned corner plugin. It won't fix the actual problem, but it will give you the rounded corners without the issue.