This is not a fancybox issue.
The demo file included in the fancybox download, targets the jQuery site for the iframe
sample .... but today most mayor sites like google, yahoo, and others etc. (and now jQuery too) don't allow themselves to be contained within iframes. I guess the demo file is outdated.
If you can place any web site within a regular html
iframe
(like your own or any other you create for instance), then you can open it with fancybox too. Check this demo and see it for yourself ... notice what iframes are "blank".
You can also check this thread for reference.
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