Yahoo widget documentation is available at http://widgets.yahoo.com/workshop/.
Yahoo widgets cannot host the browser to display Flash applets. All Yahoo widgets based on Flash require the use of a third party component called WebBrowser4Widgets available at http://www.centraltopic.com. Installing a Yahoo widget which uses this component is a very poor user experience. Several security warnings are displayed, which are too many reasons not to install the widget. Check samples at http://widgets.yahoo.com/gallery/?author=14327
For this reason, we have postponed the packaging of the Velodoc applet as a Yahoo widget and wait until Yahoo widget implements a native mechanism to host Flash applets. Considering the success of Video sites like YouTube, I cannot think of any reason why they should not do it very soon.