This is a great feature since many like me preferred Google docs over Zoho simply because of one more login.
If you already have a Zoho account with your Google or Yahoo! email address, you will be logged in to the Zoho account automatically. If you do not have a Zoho account with your Google or Yahoo email address, then you have the option to either associate the Google or Yahoo email address with your existing Zoho account (under Accounts) or you can create a new one.
It is also useful if you share your docs with your friends or colleagues, the shared zoho documents can be viewed by your friends by logging in with yahoo or google accounts.