It is true, Yahoo is dropping paid inclusion by years end, as I reported at Search Engine Land. Yahoo issued a statement, I'll cut out the part where they say they are committed to search and show you the relevant part:
Yahoo! will exit Search Submit at the end of 2009. Yahoo! is providing those advertisers affected by the decision a sufficient lead time to assist in the transition. In addition, Yahoo! has recently announced a series of important enhancements to its Search advertising business and will work closely with many Search Submit advertisers to provide them with search solutions that will benefit their businesses.
There has always been confusion over the paid inclusion program at Yahoo. In fact, it changed names a few times. There were reports that banned sites were able to be included in Yahoo via this program. Like I said at Search Engine Land, accepting money to be included in a free/unbiased search engine, just seems wrong.
I for one think this is a good move, although I know many SEOs who love this program.