I just found a plugin that seems to work well to embed iFrames into WPMU.
I had been searching for a way to offer my bloggers an appointment calendar on their blog. I saw Sue Waters EduBlogger tutorial on embedding calendars in Text Widgets, but the Agenda style may not be for all my bloggers, so I kept hunting and testing embed things, until I stumbled across "Embedit."
Embedit uses the "Custom Fields" feature of Wordpress and seems to work smoothly. We'll see as time goes on, so I may be back to dis it..
Thunk I'd share that info as I felt like I had seen that question arising at times.