The error messaging with the verification system is pretty cryptic and is something that we're looking at. I mention that because you should have seen a more specific error. You cannot create an application which has a URL that is an IP address. You will need to use a publicly available domain name for the application URL & domain URL. As well, just to note, you cannot use custom ports in the url (e.g. www.test.com:89/test.php). That should solve the verification error that you are seeing.
Please let me know if you continue to have issues.
Jonathan LeBlanc Senior Software Engineer Yahoo! Developer Network Twitter: jcleblanc