In its effort to keep present mail users happy and acquire new ones Yahoo has started a string of innovations with its email service. Like Gmail has its Labs feature, Yahoo has its applications. In the past few months they have partnered with a few websites and services and created some cool mail applications.
What Yahoo says about the Ymail Applications:
Applications from PayPal, Zumo Drive, Picnik, OtherInbox and Photobucket cover the gamut on common tasks you handle online, from transferring money to photo sharing to sending large files. We’ve reduced the number of times you have to visit multiple destinations on the Web to get things done. For example, the Zumo Drive application provides storage you can access right from inside your mailbox, giving users the ability to send large files as well as share and collaborate on documents and attachments right from their inbox.
Yahoo mail application is feature that lets the users do more from right within the inbox. The applications need to enabled from the left side navigation window. As of now they have created 11 applications altogether.
In order to use the applications you need to switch to the new mail format from the classic format. If you are interested in trying these out, you need to request Yahoo to enable applications in your account.
Send and Receive Money right from your Yahoo Inbox:
This is the latest addition to the range of applications being developed at Yahoo. Using this Application you can request money from someone or even send money to a person right from your Inbox. Very useful for people who use PayPal regularly on EBay and other Online Portals.

Send files up to 100 MB right from Yahoo Inbox with Zumo Drive:
Share It by Zumo Drive allows you to send and share large attachments (up to 100MB) with your friends and family. With Share It, you can share large files like videos, photos, and even entire folders, and the recipients can collaborate and edit the documents with you.

Picnik Application in Yahoo Mail lets you Edit and Modify Images:
Edit Photos by Picnik allows you to crop, touch up, add effects, and more, to any of the photos you have in your Inbox or online. The range of options available can rival any professional photo editor. And this being available as a web application that can be used anywhere right from your inbox to make some changes to your images is really handy.

Publish your posts for WordPress blog right through your Inbox via email:
WordPress QuickPress by WordPress.com allows you to post to your WordPress.com blog and moderate your recent comments from My Yahoo!

If you know the XML-RPC url for your self hosted blog, you can use this application to post it for a WordPress.org blog as well. It also allows you to moderate comments right from the inbox.
Other applications like the Photobucket application on Yahoo! Mail allows existing Photobucket users to log into their Photobucket account directly from Yahoo! Mail, and choose any number of photos to share with their friends and family by Yahoo! Mail. You can read more about the Photobucket Yahoo Mail application here.
The Yahoo Mail product manager Mark Risher gives us a tour of the apps in this video.