I understand Longhorn is buggy as hell, but I was woundering if there was a way to get Yahoo Messenger to work on Longhorn? It seems to display the html code in the recuved text window of an IM, but does not show the acutal text from the person tryping it. Just one more piece of software that does not work.

Well, what do you expect ?
You've downloaded an alpha OS somewhere, and you want it to run perfectly smooth from scratch ? Wouldn't you expect M$-messenger to be supported instead of Yahoo ?
Be patient till the first official Beta ships, and THEN start worrying about software that isn't supported or generates errors.
Alpha software tends to have limited support for soft- AND hardware.