Developers should go over to the YUI blog for the nitty gritty details. From the user's standpoint, this means that Yahoo's new homepage will be very customizable, with a dashboard area (on the left side of the screenshot) where you'll be able to check Yahoo and non-Yahoo applications and services. On the other hand, Yahoo will "learn" from your browsing habits and bring you content tailored to your needs. Finally, you'll feel more connected, as you'll be able to see what your friends are up to, be it on one of Yahoo's services or the web in general.
Does all this sound a bit like Facebook? It's definitely a step in that direction; a web portal should be the center of your internet experience, and social networking is becoming a crucial part of it. It seems that Yahoo has decided it's finally time to leave the old "portal" concept behind and move into uncharted territory. We'll see how this pans out for them; I've heard people say hundreds of times that the average user doesn't want customization, and that a simple, static web portal is still the way to go if you're catering to a massive audience. However, things change fast on the internet; it's sometimes better to be one step ahead than one step behind.