Do not panic - there's nothing wrong with your account. There are four versions of Yahoo! Messenger, (and now Facebook too) and you cannot be signed in to more than one without getting that response - Web Messenger, Mail Messenger, mobile phone Messenger 0r iPod, full download Messenger (smiley face icon) The most common mistake is to have the Mail Messenger open to 'Available' while trying to open the full program. (Or vice versa)
You must sign out of one to access the other one. Be sure to sign out completely, go offline or exit the one program. Clicking the red X only minimizes the program, but you are still signed in.
For the web page version, click the red X to sign out of the web page.
For the mobile phone version, sign out.
For the full, downloaded version, right-click the icon down in the system tray and select Exit at the bottom of the menu. (or Sign Out)
For the Classic Mail version, click under 'Chat and Mobile Text' AVAILABLE to ... I am OFFLINE.
For the 'All-New' Mail version, use the drop-down arrow beside "Hi, name". Sign out.
For Beta Mail, click 'Hello' beside your name, then select 'Sign out'
It's best to keep signed OUT in Mail until ready to chat to avoid this message, especially if you have two mail accounts. Then you always will be able to sign in with the version of your choice. This is true even if you accessed these services while at another computer.