Look at their updated privacy statement at http://privacy.yahoo.com/privacy (link opens in new window so you can easily refer back to the instructions on this page).
About half-way down the page, in the section on cookies, you will see a link that says WEB BEACONS.
Click on the phrase "Web Beacons." On the page that opens, find a paragraph entitled "Outside the Yahoo! Network."
In that section find a little "Click Here to Opt Out" link that will let you opt out of their snooping. Be careful NOT to click on the next button shown! It is an "Opt Back In" button that, if clicked, will UNDO the opt out.
Note that Yahoo's invasion of your privacy - and your ability to get out of it - is NOT user specific. It is MACHINE specific. That means you will have to go through this same process on every computer (and browser) you use.
Anonymizing Google's cookie
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/ Revised 26 Oct 08