Yes, frames hurt you, if you use them and don't understand that it's essentially a bunch of pages glued together with a frame that loads all the pages at once without any real link through to them that Google can follow efficiently. This can lead to a home page frame that's orphaned from the rest of the content from Google's viewpoint.
We had really good ranking at the time despite this as our home page was a non-frame page with linking to the old style user site maps that pointed directly to the relevant main pages so Google could find everything. Each main display page then had to have a javascript that would detect it was outside the frame and force a frame load. This home page then opened up the different sections as frames.
It's a clunky design that we got rid of for other reasons, one being that it doesn't work well with e-commerce integration (one frame load is several page loads, get session id's to synch through that, major headache).
Convert it to a CSS design and let frames die the death they so ignominiously deserve in exchange for producing a link tree that Google can follow efficiently from the home page all the way to the most insignificant ones on the site
