This is a general layout issue that is not related to the RadControls in any way. How to organize the real estate of your page so that both the iframe and the controls around it are visible is a decision the developers and designers should take to match their needs.
In case the most common use of your page is to be loaded in this iframe you may redesign it so that it does not require this much space.
for checking if you are in an iframe or RadWindow and here
for calling functions accross different iframes and RadWindows (get_contentFrame() returns a DOM reference to the iframe of the RadWindow so you can replace it with a getElementById("your iframe") ) to call a function from the context of the main page in your own page.
the Telerik team
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