var oParentDiv = YAHOO.util.Dom.get("parentdiv");
oParentDiv.innerHTML = '<div id="newchilddiv">Content for new DIV goes here!</div>';
...or I suppose that, after you get the parentdiv, instead of re-writing the innerHTML, you could instead add a child node using Yahoo! UI's DOM utility. I'm not sure which is the "proper" solution, but either should work.