Honestly, my opinion is that they just keep changing the algo so that legitimate webmasters have to pay for more advertising... while the spammers dont mind cos they will be normally perform better due to their saturation.
My sub-domain sites seem to be doing ok in Yahoo. I don't regularly check their rank but they are #3 and 5 right where I would expect them to be.
I've noticed this somewhat also.. my newest site is ranked #1 on msn and google for a particular keyword,, yahoo doesn't have the site on the first 20 pages I've had the yahoo bot all over the site though, maybe they are just slower on sub domains
i tend to stay away from sub.domain.com and I go for add on domains. usually hosts will give at least one of those away for free with your account. lunarpages does this.
I don't think yahoo is penalizing websites with subdomains... do you have a specific example... it might be coincidence.
Every search engine rule has its exceptions so will probably subdomains at about.com be, since about.com seems to be in love with google.