If you have tried this, you will know the problem: Facebook uses the URL of the IFrame as a link in the comment, and you will end up with the IFrame on top level. As usual, there is no documentation whatsoever about how to solve this issue.
I have decided to accept that Facebook considers its code as self-explanatory, and since the code is actually quite nice, I found the solution in the github.com code repository right away: there is an (undocumented) “url” property which you can set to the Facebook App url, and everything will work out:<fb:comments xid="CON.179" url="http://apps.facebook.com/halalatitest/contest/fbtest1"></fb:comments>
Note that this is likely to change tomorrow or something like that, so watch out.
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