I noticed a few things about getting the AutoHeight wrapper working in Joomla. The first things is that if it is setup properly it only really works in Firefox and Internet Explorer. While those two browsers do compose the lionshare of web browsers; we can't discount Safari, Opera, and Chrome.
To get the wrapper autoheight working in Firefox and Internet Explorer I had to do a few things. The first things was to make sure the website doesn't have the www. I'm not sure why this matters exactly but by doing this the autoheight always worked for me. One way to make sure that users who visit your site with www are redirect to the site without www is to go to the configuration.php in the root of your Joomla install and set the live_site to 'http://yoursite.com'. Be sure to disclude the www.
The next step is to make sure you are wrapping/iframing things on your domain. If the page is on another domain you may have mixed results.
Lastly, I had some issues with transparency of the iframed page looking strange with some Joomla templates. Including this code inside of your iframed page helps considerably.