MS CRM 4.0: How to hide IFRAME padding in CRM forms

This is the way to remove iframe padding programmatically.
Add setIFrameSource function to your crm form OnLoad event.

function onCrmFormLoaded() {
 // ...

 //Display related records in iframe
 setIFrameSource();
 
 // ...
}

function setIFrameSource() {
 if (crmForm.ObjectId) {
  // Generate url to display related records
  var url = 'areas.aspx?oId=' + crmForm.ObjectId + '&oType=10000&security=852023&tabSet=new_new_myentity=entityA_new_entityB';
  // Set iframe source
  crmForm.all.IFRAME_entity.src = url;
  // Remove padding when iframe is loaded
  crmForm.all.IFRAME_entity.attachEvent('onreadystatechange', onIFrameReady);
 }
 else {
  // Hide iframe
  crmForm.all.IFRAME_entity.parentElement.parentElement.style.display = 'none';
 }
}

function onIFrameReady(e) {
 if (e.srcElement.readyState == 'complete') {
  var doc = e.srcElement.contentWindow.document;
  // Remove scrolling space
  doc.body.scroll = "no";
  // Remove crmGrid default padding
  doc.body.childNodes[0].rows[0].cells[0].style.padding = 0;
 }
}