The latest buzzword these days is “ClickJacking”. There is discussion about this going on in various places.
The basic exploit at work here is loading a web site (such as MySpace) in an IFRAME. You then cover the IFRAME with your own content (such as e.g. a very exciting monkey-punching game). Then you position shiny, clickable portions of your monkey-punching game so that they overlap user interface elements on the MySpace page. Thus when the user clicks on your monkeys he will in reality be executing some action on his MySpace account. This works because most often the cookie will be set for the MySpace page and the user will already be logged in. With some clever design the malicious page could get you to perform complex sequences of actions on the desired target page (think forwarding your entire GMail inbox to someone else).
So how do you protect yourself against this? So far there is no live malicious web page known to take advantage of this. Frankly, I think this is a bit overhyped at the moment. But if you’re worried, you need to disable IFRAMEs on your web browser. You can do this in a variety of ways. On Firefox (which unfortunately doesn’t have a way to disable IFRAMEs in its settings) you need to install the extension NoScript. Then bring up NoScript’s configuration dialog and enable the option “Forbid <IFRAME>”. This will disable IFRAMEs and keep you safe from ClickJacking attack.
So what’s the long-term solution to this? Various browser and HTML extensions have been proposed to deal with this. Personally I think that the safest solution is to prevent IFRAMEs from loading pages from an external domain unless the user specifically authorizes it. IFRAMEs are a horribly ugly crutch anyway, and if you’re relying on them in your web page you need to either fire your web designer or read up on better ways to accomplish the same thing without using them.