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http://lists.w3.org/Archives/Public/www-style/2012Feb/0077.html
FWIW webkit just landed support for fractional iterations, but keeps the fill mode as the 0 or 100 keyframe (which I think is not what people would expect)
New thread on the topic summarizing a number of issues. I suspect this property may need to be extensively rewritten to account for these issues, as well as 15840 and 16410.
This has since been addressed by dbaron's edits.