Did nyou allow Yahoo to run ActiveX. This is needed to allow the smileys and such to work.
It works for me and I have Verizon DSL.
We finally got DSL in our area, Verizon, and got hooked up and have yahoo verizon accounts. Also, we upgrade the IE to 7.0.5730. I always did have a yahoo account. Since we now have Verizon and upgraded our IE Browser, the graphics in our yahoo composer in the Verizon browser and in IE Browser: fonts, colors, letter size, smileys, etc., do not work. Everything worked before we got DSL. What could the problem be? Thanks.