This could be because you're trying to listen to Yahoo! LAUNCHcast at a bandwidth higher than your current network connection supports. You can change your connection settings to a lower bandwidth by selecting the "standard" stream quality in the Yahoo! Launchcast Player window. By setting this to 'Standard', you may be able to better pair the connection speed expected by the player with the actual connection speed you are getting through your internet connection.
LAUNCHcast will not play on a dial-up connection. Please use a broadband (e.g. T1, cable, or DSL) connection of at least 150 kbps to enjoy our high-quality audio streams. When you use a cable modem or corporate network, you are sharing bandwidth with other users so the available bandwidth may fluctuate during the course of a song. Sometimes, these fluctuations in bandwidth can result in buffering and a song will pause or skip momentarily. This type of interference is usually temporary and will stop as soon as your connection speed is restored. To verify you're getting at least 150 kbps from your broadband connection, please visit this URL and complete a bandwidth test: http://reviews.cnet.com/7004-7254_7-0.htmlIf you're surfing to other web sites or pages while you play your station, loading those web pages reduces the amount of bandwidth available to stream music to your computer.
Another cause for skipping could be that your computer's processor is maxed out. Try quitting other applications while you are listening to Yahoo! LAUNCHcast.