Yes!

If your contact’s using a version of Yahoo! Messenger that accepts them, here’s how to send files:

• First, you can just drag-and-drop a file onto their name in your Messenger List—even when you’re not currently IMing them. Whoa!
• Second, you can simply drag-and-drop one or more files right into the part of the conversation where you do your typing. The other person will see links to either Save the file or Decline the file transfer. Either way, you’ll be notified of their decision, and if they choose to accept the file, your IM window will show the progress of the file transfer.
• You can also click the paperclip icon (above the spot where you do your typing) to attach a file. The other person will see a link on their end of the conversation enabling them to download the file.

There’s no limit to the size of files you can transfer, as long as neither you nor your friend are behind a firewall that prohibits peer-to-peer transfers. If either of you are, then the file size is limited to 100MB.