This demo shows the auto height feature of wrapped iframes which is supported since 7.0. So if you have an iframe which contains another iframe also the height of the outer iframe is recalculated. This works on the same domain and when you can use the external workaround.
Click on the link in the inner iframe which switches between 2 pages with different heights. Also the height of the outer iframe is changes than. You don't have to configure anything extra next to the auto height feature!
This is the shortcode of the green iframe:
[advanced_iframe securitykey="da39a3ee5e6b4b0d3255bfef95601890afd80709" use_shortcode_attributes_only="true" src="http://www.tinywebgallery.com/blog/advanced-iframe/demo-advanced-iframe-2-0/same-domain-wrapped-auto-height/same-domain-wrapped-iframe-1?content-only=1&css=1" height="200" width="100%" onload_resize="true" style="outline:1px solid green" scrolling="no" iframe_content_id="body" iframe_content_styles="padding:10px;"]