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I've found no evidence that a site will get punished for using frames - but google will only read the framed link, not the content of it. So the page need its own on-page content, otherwise pages will be marked as "duplicate content". I would definitely use both title and a paragraph in the iframe-tag to describe the content, to avoid the duplicate content issue.

I agree. You'll be notified in GWT. Forget about trying to get you site in DMOZ. Submit it and forget about it. I have been trying to get into DMOZ for a couple years now. BUILD quality content on your landing page. Watch this WBF: http://www.seomoz.org/blog/the-new-onpage-optimization-whiteboard-friday