Download the plugin from here and install it. After installing the plugin you can configure to receive your friends updates every minute or once in few minutes. When you change your Yahoo messenger status it will sync this with twitter, and when you update twitter with a new tweet, that will become your status message in Yahoo Messenger, how cool is that :).
It is not a desktop twitter client, it shows the latest tweet from your received tweets, if you click that a side windows opens with last 10 tweets from your twitter friends. There is no way to see more tweets or to post to twitter directly, only way is to set a new status message all time, which is not useful if you are active twitter user. So that said it is nothing more than a feature useful for Yahoo IM users to sync status between twitter and Messenger.
when I download the Twitter-yahoo it says this plug-in has failed. Then I wait for a while an try it again an still says the same thing. I am using the updated version of yahoo.