As of now, anyone can log in to Flickr using their Yahoo! ID. New users will have to use their Yahoo! ID (or create a new one if they don’t have one); older users can continue to use their existing Flickr.com account details to log in, or choose to merge their Flickr.com accounts and Yahoo! IDs together*. One note: Existing users will be able to keep their existing screen names on Flickr whether they choose to merge accounts now or not – you don’t have to change your name.
It’s special and fantasic because these kinds of things are always a grand pain in the bum to program. But really, also because it saves you having to remember another password and which email address or ID goes with which site. But really, really, it is mainly great for reasons which are yet to be revealed (since we can’t give everything away). But it will lead to all kinds of neat things Flickr users (and Flickr-the-website) can do to make the most out of our place in the Yahoo! family.
We’ve also made several changes to the way we send out invites and handle the sign-up process when you invite friends and family into Flickr — it is much, much friendlier and easier now. And given that a few hundred million people already have Yahoo! accounts, it is very likely that the "create an account" part of people accepting their invites will be faster and easier too. So, good!
*Having said all that, there may be reasons why existing Flickr users would not want to associate their accounts yet: if you use API-based programs developed by outside developers, your favorite programs may not work until those developers update their programs to work with the new authentication API – many developers are already doing this, but during the transition process you’re better off to ask first and merge later!