Few days ago I noticed that pidgin is unable to connect to my yahoo account. I decided to have a look at the matter and realized that Yahoo has changed the way of the authentication as part of upgrading their software.
pidgin released a new version that uses the new method (2.5.7). so I had to upgrade my 2.5.2 to the latest version.
There was something wrong when i tried to follow the instructions on pidgin website. So I went to downloading the source code, following the instuctions in the INSTALL file to compile, build and install pidgin.
I needed also to upgrade libpurple to 2.5.7 by:
apt-get remove --purge libpurple0
apt-get install libpurple0
Finally, I was able to connect to my yahoo account :)