I was always under the impression that a 301 redirect would tell all bots that a page has permanently moved and now resides on the destination page, so they should transfer all link/search equity over to that page and remove the old page from the index. I also believed that a 302 redirect was the opposite, and told the engines that the destination page is only a temporary home and should not be indexed. Apparently Yahoo does not agree:
Have they always handled redirects in this manner? Is this why their index is littered with pages that return 404′s, since webmasters who perform 301 redirects from top level pages down to deeper pages may remove those top level pages after awhile? This article was updated by Yahoo fairly recently (in May 2009), so perhaps this is something new.