Index: modules/overlay/overlay-parent.css
===================================================================
RCS file: /cvs/drupal/drupal/modules/overlay/overlay-parent.css,v
retrieving revision 1.10
diff -u -r1.10 overlay-parent.css
--- modules/overlay/overlay-parent.css	18 Jan 2010 03:29:51 -0000	1.10
+++ modules/overlay/overlay-parent.css	22 Feb 2010 23:26:45 -0000
@@ -88,19 +88,12 @@
   padding: 0;
   width: 100%;
   overflow: visible;
-  background: #fff url(images/loading.gif) no-repeat 50% 50%;
-}
-.overlay-loaded #overlay-container {
   background: #fff;
 }
 .overlay #overlay-element {
   overflow: hidden;
   width: 100%;
   height: 100%;
-  display: none;
-}
-.overlay-loaded #overlay-element {
-  display: block;
 }
 
 /**
Index: modules/overlay/overlay-parent.js
===================================================================
RCS file: /cvs/drupal/drupal/modules/overlay/overlay-parent.js,v
retrieving revision 1.27
diff -u -r1.27 overlay-parent.js
--- modules/overlay/overlay-parent.js	20 Feb 2010 14:48:38 -0000	1.27
+++ modules/overlay/overlay-parent.js	22 Feb 2010 23:26:45 -0000
@@ -277,10 +277,6 @@
   self.$iframeDocument = null;
   self.$iframeBody = null;
 
-  // Reset lastHeight so the overlay fits user's viewport and the loading
-  // spinner is centered.
-  self.lastHeight = 0;
-  self.outerResize();
   // No need to resize while loading.
   clearTimeout(self.resizeTimeoutID);
 
@@ -593,26 +589,25 @@
  * Note, though, that the size of the iframe itself may affect the size of the
  * child document, especially on fluid layouts.
  */
-Drupal.overlay.innerResize = function () {
+Drupal.overlay.innerResize = function (height) {
   var self = Drupal.overlay;
   // Proceed only if the dialog still exists.
-  if (!self.isOpen || self.isClosing || self.isLoading) {
+  if (!self.isOpen || self.isClosing) {
     return;
   }
 
-  var height;
-  // Only set height when iframe content is loaded.
-  if ($.isObject(self.$iframeBody)) {
+  // When no height is given try to get height when iframe content is loaded.
+  if (!height && $.isObject(self.$iframeBody)) {
     height = self.$iframeBody.outerHeight() + 25;
-
-    // Only resize when height actually is changed.
-    if (height != self.lastHeight) {
-
-      // Resize the container.
-      self.$container.height(height);
-      // Keep the dim background grow or shrink with the dialog.
-      $.ui.dialog.overlay.resize();
-    }
+  }
+  
+  // Only resize when height actually is changed.
+  if (height && height != self.lastHeight) {
+    // Resize the container.
+    self.$container.height(height);
+    // Keep the dim background grow or shrink with the dialog.
+    $.ui.dialog.overlay.resize();
+    
     self.lastHeight = height;
   }
 };
Index: modules/overlay/overlay.module
===================================================================
RCS file: /cvs/drupal/drupal/modules/overlay/overlay.module,v
retrieving revision 1.9
diff -u -r1.9 overlay.module
--- modules/overlay/overlay.module	16 Feb 2010 00:27:34 -0000	1.9
+++ modules/overlay/overlay.module	22 Feb 2010 23:26:45 -0000
@@ -462,6 +462,9 @@
 
     case 'child':
       drupal_add_library('overlay', 'child');
+      // Pass child's document height on to parent document as quickly as
+      // possible so it can be updated accordingly.
+      drupal_add_js('if (jQuery.isObject(parent.Drupal) && jQuery.isObject(parent.Drupal.overlay)) { parent.Drupal.overlay.innerResize(jQuery(document.body).outerHeight()); }', array('type' => 'inline', 'scope' => 'footer'));
 
       // Allow modules to act upon overlay events.
       module_invoke_all('overlay_child_initialize');