I would suspect a problem with the Yahoo toolbar for this. Try uninstalling it under Tools>Addons>Extensions. I would also uninstall it under Control Panel>Add/Remove Programs (XP) or Programs and Features (Vista and Win 7).
I can't see from your screen shot (too small), but who is your default search set to in your Search box?
I can't see from your screen shot (too small), but who is your default search set to in your Search box?