I don't know if you might be able to help me. I have a btinternet.com address - and when I bought my ipod touch on Saturday it synced straight away using the default "Yahoo" settings (I always log on webmail on my PC via Yahoo and have never had a problem), and it sent a test email perfectly fine.
However the next day I got the error message which is along the lines of "incorrect password or username." After a few attempts at re-entering my password I decided to delete the account and try again - no such luck. Since then I have not been able to sync using the default Yahoo! settings, always getting the username/password error message.
So I was happy to find your post on here, but unfortunately the settings using the "other" route only partially work:
1) When first syncing all emails came through unread.
2) I cannot send emails from my ipod touch.
I just find it strange that I was initially able to sync using the default Yahoo! settings no problem.
Any help would be most appreciated.