According to Google Index Size Study">this recent study done in August by Matthew Cheney and Mike Perry, students at the University of Illinois, Google wins. But not just by a nose. According to the students data, based on 10,034 random search samplings, Google returns about 65% more results than Yahoo!.

"For our study, instead of focusing on documents that match the common "web words", we chose to focus on the more obscure documents of the web -- the "long tail" of the search index."
But this kind of methodology resulted in a few problems, "...this method resulted in a large number of "dictionary" or "wordlist" files showing up in the results. This presented an unforeseen bias since Google indexes and saves a much larger percentage of each webpage than Yahoo does..."
To deal with this problem the two students used a third "not" random word, "...we modified our original search parameters of searching for two random words from the commonly available English Ispell Wordlist (a total of 135,069 words). Instead, we searched for two random words and not a third random word. This method, we feel, helps to exclude the vast number of "dictionaries" and "wordlists" because those results should be filtered out by the "not a third random word" part of our search query."

The results were a bit higher than I had expected, "Based on the data created from our sample searches, this study concludes that for a random set of words a user can expect, on average, to receive 65% more results using the Google search engine than the Yahoo! search engine. In fact, in the 10,034 test cases we ran, only in 16% of the cases (1606) did Yahoo! return more results. In 83.7% of the cases (8399) Google returned more results. In less than 1% of the cases both search engines returned the same number of results."

So does Google really win?
Well that depends on how you look at things. I think even before this study it was common knowledge that Google has a larger index that Yahoo!. The real question is will you find what your looking for. I search the internet everyday, and not just a few times, my job requires me to search the internet for things often hundreds of times in a day. So I spend a lot of time looking at search results. The bottom line with the search war is that it's not so important how much you get back, as, is what I get back what I'm looking for. Both Google and Yahoo! are good at returning relevant search results, but from my experience there both about the same, with Google throwing in a random curve ball once in awhile. Like a free ad based site when you search for something like "Sony DVD Player Manual". Yahoo! seems to be better at curbing those kinds of results but Google honestly does give a better range of data. So it really depends on what your looking for, and how your looking for it. This author uses both search engines on a regular basis but honestly leans towards Google more than Yahoo!.