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I think you can accomplish this by doing the following:
1. Install the themechanger module
2. Make a copy of your current theme, or just use another theme
3. In the theme changer module, change the settings so that your news module uses the theme you chose above.
4. Whatever theme you have chosen to use, open up the theme.html file and (if using Dreamweaver), in design view, remove the right and left columns, as well as the header and footer areas....you should just have one table, with the code for displaying the content in the middle left. You may have to test this several time to make sure it works properly.
5. Now, when you call this page in your iframe, all you will see is the module data, and not the side columns.
You could also just make these changes to the default site theme, the theme you are using for the rest of the site, but that may make it difficult for you to find all the administration links etc. By using the themechanger module, you will only be changing the theme on the news module itself.
Hope that helps,
Jeff