...... Yes, it can not be used in commercial applications.
Robyn Tippins Community Manager, YDN
If a company intranet homepages for internal use is required to using these Weather data (in XML-format), should the company obtain the licensing information and/or permission from Weather.com directly (according to Yahoo! General Questions). As a result, may we know this licensing and permission information in order to use Yahoo Weather (and/or Weather.com) information.
Clearly an iPhone app falls into commercial use territory, so how is it that the Apple iPhone Weather app is using Yahoo data? I realize they are Apple but is there a mechanism to license/pay for the weather service?