I finally found a workaround to get Ymail accounts working on the Motorola Droid that I hope will work for others. I was not able to find a thread (maybe I missed something) where someone got this working. This is a little bit of a kludge but it worked for me.
What I found, it was not possible to setup a Ymail account like you setup up a Yahoo account on the Droid. Everytime I tried this, I received some type of error. In order to get to this work, you need a Yahoo mail account. I had an old one - if you don't have one just set one up. I then used the following instructions to setup my yahoo mail account.
Make sure Wifi is off.
go to mail icon
add account
enter email address in email address filed (name@yahoo.com)
enter password at password field
select MANUAL SETUP not next
select imap
username=
name@yahoo.com
password = yourpassword
imap server= imap.mail.yahoo.com
port=143
security=none
optional = blank
select next
Then, set the outgoing SMTP server to:
smtp.mail.yahoo.com, port 587, security=none
and finish the setup. Hopefully this will work and you can access you yahoo mail account.
Next, click on the email icon (you just setup), bring up the menu and select account settings. Choose Incoming settings and change the Username to your Ymail account -
name@ymail.com and save the settings.
For me, this worked! Hopefully it will work for you.
Let me know if it does.