Outlook Express has a nasty habit of 'screwing up' email settings, even though they might still appear to be correct. The simplest way of dealing with the problem is to delete the Outlook Express account and then create it again. (Deleting the account doesn't remove any existing mail!).
Click on Tools > Accounts > Mail
The name of your BT Yahoo account might already be highlighted. If not, click on it.
Click 'Remove' and 'Yes'
Then follow these instructions to create the account again:
http://www.btyahoo.com/faqs/manual_email_setup
Chris