Use of an Iframe for the search box should not noticably hurt performance (unless you're serving up hundreds of page requests a second).  However, you'd probably do better to use the new AJAX version of Google search rather than the older "post-and-refresh-target-frame" method as used in this case.  Unless you're trying to avoid the use of JavaScript, the AJAX version offers several notable enhancements such as dynamically updating the target page with search results without interrupting anything else going on in the page.  For instance, if you had an embedded YouTube video running on the page you could perform an AJAX-based Google search and display the results without interrupting video playback.  You can even click through multiple "pages" of search results without actually refreshing the web page.  Besides the UI features, could also benefit from better web stats:  unnecessary posts/refreshes could falsely inflate page hit statistics.

I've posted some info on using the AJAX version of Google search within DNN.  There's even a brief walkthrough (including a working example) of implementing multiple Google AJAX searches at the same time (example: run a web page search + file search and display each set of results in separate lists without leaving or refreshing the page you're on).

Here are links for anyone interested in trying the AJAX version: http://googleAJAXsearch.com

   Add Google AJAX Search to DNN (Part 1): http://eguanasolutions.com/Blog/tabid/54/EntryID/7/Default.aspx
   Add Google AJAX Search to DNN (Part 2): http://eguanasolutions.com/Blog/tabid/54/EntryID/9/Default.aspx
   Add Google AJAX Search to DNN - Prevent ENTER key from clearing search results:  http://eguanasolutions.com/Blog/tabid/54/EntryID/14/Default.aspx

I've got a bit more info to post on the subject -- I just have to find the time to do it.  Hopefully the info I've already posted is enough to help people make the jump from the old post-and-refresh version of Google Search to the new AJAX version of Google Search.

Cheers!
-mamlin