Logically enough, Yahoo Mail treats RSS like, well, e-mail: Your feeds sit in the same pane with your mail folders, and you can e-mail items and move them into the folders you use to manage e-mail. Your feeds are subfolders within a folder called "All RSS Feeds"; click on that folder, and you see all items from all your feeds in one continuous stream.
Everything's done with Yahoo Mail's new AJAX interface, so it feels more like a powerful desktop application than a mere browser-based service. (On the downside, the beta version is a tad slow by desktop standards--at least at this very moment in Firefox on my Wi-Fi-connected laptop.)
Here's a peek at the interface:
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Of course, Yahoo already has a fairly sophisticated RSS reader--My Yahoo. And thankfully, your My Yahoo RSS subscriptions are simply your Yahoo Mail RSS subscriptions, and vice versa--add or delete feeds in one interface, and your changes will be reflected in the other. (This sort of pan-site integration, by the way, is something Yahoo still does way better than Google: Google's personalized home page and Google Reader both speak RSS, but neither seems to know the other exists.)
At the moment, Yahoo Mail only lets you add feeds by choosing from a smattering of recommended Yahoo picks or entering a feed URL. (My Yahoo has more pre-programmed feeds, and lets you find feeds via keyword searches.) More robust tools for choosing, importing, and exporting feeds are apparently on the way; I hope that Yahoo also adds the ability to sort entire feeds (not just individual items) into custom folders, and (like Bloglines and Newsgator) adds a count of how many new items there are in each of your feeds.
But like I said, this is already a slick way to do RSS...and it makes a lot of sense to do it in an application you visit frequently anyhow. Here's hoping that it, and the rest of the new Yahoo Mail, go completely public soon...