Needs some work before it'll look pretty in IE due to the PNG graphics.
It similar to a design I recently did, keeping the header/nav at the top with a drop-shadow over the body. The only difference is I didn't use an iFrame and the body scrolls with the page as normal while the header stays put, like gbark explained. Simple enough to do, except IE takes a few tricks (but no JS needed).
It looks fine, but the mail/rss buttons are somewhat hidden behind the nav. And because of the transparent parts of the nav bar, the buttons look more visible than they really are, as most of it is technically behind the navbar and unclickable except at the very top of the graphics.

"Any sufficiently advanced technology is indistinguishable from magic" ~ Arthur C. Clarke