OK
Done some more checks.
I can chat, see and send webcam etc in Yahoo and all works OK. As soon as I try and use photo share the problem occurrs. I can see the very rough picture but cannot get it to load fully - ie the pixellation occurs.
My works machine through my router etc all seems ok, chat and pics all works as expected.
Attempts to log into Yahoo for email is extremely slow. Cannot see any Yahoo settings that are wrong - but I guess this may be an internal to Yahoo issue.
Anyone else having any Yahoo related problems ?