Is it bad that I remember iframe as an old HTML tag?
From what's been found so far iMoive on the iPad 2 will only take M4V at 720p with no more then AAC 44.1 kHz audio. Even 48 kHz will keep it from seeing the video.
I really have no idea if iFrame will work. Apple has said only iPhone, iPod, or iPad recorded video is supported.
A workaround has been to use ReelDirector to transcode videos on the iPad and then import that output.