Local files, using the file= link, is handled like any other plain
HTML page, and the links similarly trawled without problem. The wrapped page is part of the page, unlike using an iframe, whose content isn't properly indexed.
I'm going to release an update soon where you can modify the header.php file somewhat like the TitleHack from
lottasophie to get custom page titles based on the wrapped page as well as some other metatags, like Description and Keywords. Actually, it's in the current version, but I haven't really documented the header hack yet. Proper titles and meta description will help search engines, and make links more appealing to the Googlers out there.
The update will also make better use of the
PN security schema.