Yahoo messenger uses flash to present the emoticons.

If from some reason you’re unable to see those emoticons try one of those two suggestions:
Login as administrator to your computer < update flash player by browsing to adobe site or type ‘flash player’ in Google. Yahoo 9 and north uses the flash player 9 and 10 engine so that if you use flash 8, in some cases there can be a problem.
In other cases, part of the users that logs in to the same computer can see emoticons and some don’t. This is a security issue that can be handled as follow:
1.       Login as administrator to your computer.
2.       Go to yahoo messenger directory (usually its: c:\program files\yahoo\messenger).
3.       Right click ‘messenger’ folder and choose ‘properties’.
4.       Click the ‘security’ tab.
5.       Add the problematic user or group security list.
6.        Give it a ‘full control’ or ‘modify’ permissions.
7.       Logoff the administrator user and login back with the problematic user to check if problem solved.