When I embed an iframe tag in normal mode using either a plugin or source mode, everything displays fine. As soon as I change the edit mode to inline, the iframe attributes seem to be stripped out of the properties and replaced with the style of the encapsulating div.
Here's the code that's being put in the editor.
<p><strong><span name="embed"><iframe allowfullscreen="" frameborder="0" height="316" scrolling="no" src="http://www.youtube.com/embed/6hWnDTm3oCg?wmode=transparent" width="560"></iframe></span>Inline Editor Testing</strong></p>
You can see in the code there should be a width and height property added to the iframe, and it is when you view in normal mode.
See the images for the results.
Adam