With this example, I have attempted to convert this new YUI example and make it run inside of Adobe AIR.
This example contains a patched version of the YUI Editor that makes the Editor render inside of AIR. The Editor contained in this app is not a fully functional version of the Editor Control (I am still working on that).
This is not a new product from Yahoo! or YUI, just a demonstration of how YUI components can work in concert in the context of a more complex application.
So you can see what I have done, I have included the source for the AIR app here.