Heya, Andy
Galaxy hasn't been designed to be loaded in an iframe yet.
Currently, the javascript in Galaxy makes use of the window variable top - which points to the highest browser window in the DOM. There are many instances where we rely on both 'top' and the link target '_top' to control the iframes used inside the platform.
In your implementation, top won't point to the Galaxy frame - but to the frame you've created. This can lead to pages/features that won't load (and fail silently unfortunately).
We are currently working to remove our use of iframes within the platform which will help with embedding Galaxy into a frame.
In the meantime, you may be able to alter those references to top to point to parent (which is context dependent) or to a named frame (naming the outer Galaxy frame and using that as a link target and replacement for top).
Hope that helps.
(with apologies to Andy for missing the mailing list in my first reply)