The default behavior for an iframe-based canvas page is for it to be "smartsized",
in which the iframe fits the remaining space on the page. This option does not allow
the application itself to control or change the size of the iframe. For example,
the smartsize attribute does not help an application that wants the canvas page
to fit the content of iframe when the size of the content itself is not fixed.

To solve this issue and give developers more control on the size of the iframe element
on their canvas page, we added a new "resizable" attribute (that also applies to
the fb:iframe tag) that allows application developers to use JavaScript inside
an iframe to query and control the size of the iframe element that hosts it.

You can see a demo of an iframe-based application using this feature at this link.
You can learn more about this feature on the Facebook Developers Wiki at http://wiki.developers.facebook.com/index.php/Resizable_IFrame.

The resizable option for iframes is supported in the updated Facebook JavaScript
client library. See this link
for more details.

Source: http://developers.facebook.com/news.php?blog=1&story=93

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