Yahoo and Flickr are combining their login procedures. It will be possible to log into one site and be logged into the other. New users will need to sign up to Yahoo to use flickr. Existing users do not have to merge accounts. I have one thing to say about merging, don't do it.
It was a complete disaster for me. My machine logs into flickr automagically, it is a private machine, no problem. After the merge this did not happen, despite ticking the necessary boxes on the Yahoo site. Each and every time I went to Flickr, I was logged out. A major pain. This is a major issue at the moment, but I'm sure it could be fixed, so it isn't a long term objection (despite yahoo asking for passwords all the time for my security... I'm happy for that to be a default, but let me turn it off!)
On top of this, if you use any helper programs to upload your photos, these get confused. This will be fixed, and so isn't a long term problem either.
There is the issue of forcing flickr users to get Yahoo accounts (I already had one). This gives rise to bad feeling. Yes, make Yahoo easy to click through to when in flickr. Yes, make it so that when you're logged into one you log into the other (but there is no reason to have the two accounts made one) - but for goodness sake, keep them distinct. Flickr is Flickr in its own right. I know it's owned by Yahoo, but for goodness sake, Yahoo, diversify! There is something unpleasant about your crowded interface, don't let this infect flickr too!
At the moment, the killer for me is the forgetfulness of yahoo when I ask it to remember me, however, if flickr became like the rest of yahoo in look and feel, that would be a real problem.
No, this is a bad move - I unmerged my accounts, and will keep then unmerged until dragged kicking and screaming to merge them again.... and if that happens, I will have my fingers crossed that Google will by then offer a photo hosting alternative, with a one click 'import from flickr'.
... and this is from someone with a paid flickr account until 2009