I don’t think this is it. I don’t have Yahoo! toolbar, so I would be getting the same message whenever I log into Mail if this was the case.
It sounds like you recently set installed or something up on Yahoo!, but did you just make a new account? Upgrade to new Mail? Installed a “Super Fix Ur Computer Now!” program that had an odd ticking sound?
It’s not any sort of spyware. Somehow IE9 misreports as IE7 in some instances (those scripted images that tell you what browser you’re using also say IE7). Since yahoo requires IE9 to do their latest mail page, it tells you that you need to upgrade.
No idea on the fix, just clarifying that this isn’t some sort of malware issue.
First, right-click on a blank space in the toolbar area (to the right of that “More >>” button will work) and check “Menu bar”. This will add some menus to the top left.
Under the Tools menu, click Compatibility View Settings.
In the “Add this website:” field, type http://us.mg2.mail.yahoo.com (ETA: I pulled this URL from your screenshot; if it’s not the one you normally use to access your mail, use that one instead.)
Click “Add”, then “Close”.
Once you’ve done that, try accessing your mail again. What this does is cause IE9 to pretend it’s IE8 when you access the sites that you add to that list…hopefully it’ll knock some sense into Yahoo Mail for ya.
Hrrm. Might be an older version of the IE9 beta…the original didn’t have the menu bar available.
In any case, we can test this a little more easily. See that little blue icon to the right of your URL bar that looks like a broken rectangle? Go to your email login page, then click that. It’ll reload the page in Compatibility Mode. See what that doesn’t do.