i was having same problem so i ended up here while trying to find solution
Thanks to Tricky that i could solve this problem now
when you try to add yahoo account try as normal with email address and password
i know you will get error message and i think most of us have problem here and could not go beyond.
NOW go to manual or advance set up
where by default protocol is in 'pop' change it to 'imap'
and rest of the others settings should have been filled as you had tried before
NEXT go to pop sever which later will be changed to imap server and edit the default 'pop.mail.yahoo.com' to 'imap.mail.yahoo.com'
and leave the rest as it is and hit next
it should solve your problem as it did mine, IF NOT i guess we both didnt had a similar problem LOL
happy surfing yahoo mail in ur HTC Desire