I emailed Seam O'Malley, director product management, Yahoo messenger, about the MSN/Yahoo deal, trying to get the skinny on what it means:

[via email]

Stowe: Will the interoperability be more than text messaging?

Sean: In addition to exchanging text IM messages, people will be able to see friends' presence, share select emoticons, add new contacts from either service. There are also plans to extend interop. to PC-to-PC calling capabilities. People do not need to have two separate IDs for both services to take advantage of interop. E.g. A Yahoo! Messenger user will be able to log in and take advantage of the above features with MSN Messenger users.

Stowe: Specifically, will voice, video, and multi-user chat be supported?

Sean: There are plans to extend interop. to PC-to-PC calling capabilities.

Stowe: Is there any plan for general interoperability? Namely, interoperability with AIM, Skype, and others?

Stowe: Right now we are focused on the complexities around connecting these two communities - which will take months to implement. This is a non-exclusive deal and we look forward to exploring opportunities to interoperate safely and securely with other IM communities.

Stowe: What about integration with other Yahoo contact list oriented solutions, like Yahoo 360?

Sean: While this will not be a part of the initial launch in Q2 2006, we will continue to evaluate new features and innovate and deliver enhanced services to our users.

So it does look like an attempt to consolidate in response the the Skype/eBay colossus, and the growing threat of Google: Gtalk is just the tip of an iceberg.