after installing fancybox for wordpress 2.6.0, i was unable to get external html to render in a fancybox iframe. i traced this problem to its source: the contents of the file "jquery.fancybox-1.2.1.pack.js?ver=1.3.2" do not match those of the identically named file on the author's functioning demo site: http://blog.moskis.net/wp-content/plugins/fancybox-for-wordpress/jquery.fancybox-1.2.1.pack.js?ver=1.3.2
overwriting the contents of the file distributed with the plugin with the version the author is using on his site fixes this problem.
however i am still unable to set the dimensions of the fancybox when calling an iframe. there are fields for this in the advanced gallery settings screen, but changing them has no effect.