Hello as the title says "are ads allowed in iframes" i could see frm some network TOS tht the page should have some content..but in an iframe just the ad and no content is it illegal? How will the script check out... my content in the main page and show relevant ads
I think most companies do not allow it. Check each ones terms. I would not do it or use pop ups for ads.
as rcj662 said, mostly it is not allowed. So better option for you would be to mail the concerned company and ask it. As far as Adsense is concerned, there are also different opinions so better would be to ask it from them. As per Webmaster World: http://www.webmasterworld.com/forum89/11866.htm