Does your new password work when you login directly via web?
If so, try deleting your account and re-enter your details on your iphone.
It might have cached your old password and hence not able to login.
. When you have completed the installation process, you should see a confirmation message in your browser window. Click "Sign up now" under "Get a Yahoo ID. "
If you closed the browser window that displayed the "Congratulations! You have successfully installed Yahoo Messenger", then you can go to http://messenger.yahoo.com and click the "Sign Up" link next to "New User" at the top of the page.
2. Complete the Yahoo Account form. A sample form is shown below.
While it's not required include an an alternate email address on the Sign Up form, it Yahoo login name/password, Yahoo will send you an email with the login name/password to the Yahoo email address that was created when you set up your messenger account. However, since the login and password for your Yahoo email account is the same as the login for your Yahoo Messenger account, you will not be able to retrieve the email. In this case you will be forced to create a new Yahoo account.
3. Write down the User ID and any other pertinent information from the confirmation screen. Keep this in a safe place as you will need the login name and password each time you use Yahoo messenger/Yahoo email.
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