Frames contain content. If the content doesn't fit inside the frame, then the content will be truncated. There isn't a way to "fix" that, since nothing is really broken. Frames are frames, and that's how they behave.
There is nothing magical about DIVs, they are simply organizational block elements. The idea is to break your page into sections, and code each section into a DIV. Your menu would go in one DIV, your left-hand panel into a second, and your main page content in a third. Use CSS to control the position and style of each DIV.