I have both my main Yahoo account and one of my sub acccounts set up on my iPhone and they both work just fine. Went through the same, standard process for each account, so I don't have any special tricks or whatnot to tell you, sorry. Double-check the password, and see if you can access the account from another POP client, is all I can think of.
Thanks for confirming for me that sub accounts work! I finally had success too. Here is the method I used for setup - I won't play around enough to figure out why it works, but it at least worked for me. Up until now, I had my iPhone telling me my User name and/or Password were incorrect.
First I went to my settings panel and turned off WiFi so I knew I would be on EDGE.
Next, I deleted my old Yahoo! setup, turned off my iPhone and then turned it back on for a reboot.
I went to Yahoo! mail on my laptop and logged out of my regular account. I then logged into Y! Mail using my sub account username. I sent an email from my sub account to my main account through the web interface to make sure I could send.
I went back to my iPhone at this point and recreated the Yahoo! Mailbox (I just said it was Yahoo! mail, nothing special) and used my sub account settings. (In case anyone didn't realize it, your sub account or "extra email address" uses the same password as your main account).
Everything worked correctly and I was able to send an email using EDGE from my iPhone to my Google account. (Which is also on my iPhone, haha)
I turned WiFi back on... I don't want to forget that!
Finally I sent an email from my laptop to my iPhone "myrealnameMobile" Yahoo! account. Within 5 seconds it rang at me that I had a new email. I wish it had popped up with a notification on my screen though, like with an SMS, it would be pretty easy to not notice a quick buzz.
So there you have it. I anticipate it will probably work well when I am actually connected to WiFi too - I will update this post if it doesn't.