First, ensure that this feature has been enabled on your account by clicking on the Preferences menu. Under General Email Settings you will see a section for 'Highlight & Search'.
Next, when viewing an email, simply highlight the word or phrase (up to 50 characters) you would like to search for and after a 1 second pause the pop-up menu will appear.
Lastly, click on the 'Search Yahoo! for 'your criteria'"...' section and your results will automatically populate in a new window.