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Search Engine Roundtable says:

Yahoo! has a Search Engine Optimization (SEO) Resources section, where they list out sites included in the directory in order of "popularity."

Yahoo! defines popularity as:

By default, Directory site listings are presented sorted by popularity and relevance. Sites that are most popular with users or the most relevant to the category appear at the top of the site listings. The order of web sites or web documents is based upon Yahoo! Search Technology. If the category is large, the listings will display over multiple pages with pagination displayed at bottom of the page.

Sagerock on WebmasterWorld says:

So all you have to do is make your site more popular. Basically, that means more people need to click on your directory listing than on other peoples' listings.

However, Yahoo! says 'order of web sites or web documents is based upon Yahoo! Search Technology.' Now if only it was clearly mentioned what is the working of popularity algorithm, it would have been all play and no work.

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