What worked for me on two different Ipads is the following, even though this is not what you are instructed to do by either Apple or Yahoo. Note these instructions assume you have upgraded to 5.0 or 5.0.1.
First, delete the old account (under settings, mail/contacts/calendars, find yahoo account, and delete it). You will get a warning message that the calendar events will be deleted from the Ipad. No problem, you don't want them duplicated anyway when you add it back.
Next, select add an account. Here is the different part, where what I'm telling is you different from normal guidance. Add a Yahoo account - do NOT add "other account/CalDav account" which is the instructions you receive from both Apple and Yahoo. When you add the Yahoo account, you will have the option to select mail, contacts, notes, and calendars to synchronize. Choose which you want to include. Enter the information required (Yahoo username and password). You may get a message about the security certificate not being authenticated... accept that... and proceed.
Make sure your settings have frequent updates/fetch and is not set on "manual".
This is what worked for me, after trying multiple different ways to try to go through Other/CalDav - which always resulted in a "verify account information" error.
Good luck, hope this works for you too.