This improves user experience and promotes the feeling that Yahoo! is genuinely trying to help users navigate the web, rather than keeping them in one place and cross-selling its own products and services.
However, delving deeper into the search capability, I believe Yahoo! might be trying to do too much too soon.
With Bing, Microsoft has separated its search offering in an attempt to take Google head-on. Google has effectively retained the same interface, but has always been testing extra search capabilities, choosing to keep them reasonably low-key.
Yahoo!, in contrast, seems to have jumped straight in, offering several extra features such as Search Assist and Search Pad.
I question whether users will really use these tools. Over time, people's search behaviour has become more sophisticated, but a search engine's job is to provide results with minimum effort. Yahoo!'s of options might scare users back to a simpler offering from a competitor.
Agency: In-house.