Yahoo Messenger now has an iPhone app (iTunes link). It lets you IM your friends, see their status, share photos, share links, choose emoticons, and see recent conversations. It also lets you send free text messages by choosing a contact’s mobile phone number if they are not online. Replies come back to the app, which could save you a dime each time.
When you leave the app to answer a call or do something else on your iPhone, your status is changed to idle. You can also sign out of the app entirely. (This is a workaround to the inability to have multiple apps running at the same time in the background on the iPhone).
You can check out the video below to see how Yahoo Messenger looks on the iPhone, or get more details on the Yahoo Messenger blog.