This one-click feature gives Google access to the user's Yahoo e-mail address and authenticates the user's identity, allowing him access to the wonderful world of Google's web-based applications and services, including Reader, Docs, AdWords and more.
While signing up for a Google account wasn't the most brain-taxing process before, the new OpenID flow significantly reduces the number of speed bumps and practically makes Google account creation idiot-proof. And as even the simplest armchair UI/UX enthusiast will tell you, a simpler signup process equals more users.
Google vs. Yahoo? Not Quite
The more interesting question is: Does this mean Google is declaring war on Yahoo?
Yes and no; the answer is as intricate as web traffic and the history of the consumer-focused Internet.
Yahoo still captures a large share of Internet users who turn to the dotcom era giant for utilities such as e-mail, search and news. Making it simpler for that mass of users to transition to Google for similar services might be seen by some as a threatening move. Of course, Google will siphon off as many Yahoo users as it can for those services; that's how the market works.
However, this doesn't mean Google can or will slaughter Yahoo as a company by any means. For example, Yahoo is still dominating in areas such as dating (Yahoo Personals are going strong) and image hosting (Flickr outperforms Google's Picassa by a wide margin).
In short, while many Yahoo users will be glad to have Google accounts and services, this is hardly the end of the line for Yahoo, nor is it the declaration of a death match of some kind. Google's most recent move seems to be half good user experience, half playing nicely with others.