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The color yellow is used in World of Warcraft in various different ways. One way is as part of the usual Blizzard quality color system for items (gray, white, green, blue, purple, , gold) or difficulty for mobs (gray, green, yellow, orange, red) and tradeskill recipes (gray, green, yellow, orange).
No items' names should appear in yellow letters.
Some mobs' level numbers appear in yellow digits, although the color depends on the level of the character who views them. "Yellow mobs" are mobs that are around the same level as your character (between two levels lower and two levels higher) and therefore moderately difficult to kill and should yield decent experience. Green mobs are usually lower level than you and give slightly less experience. and red mobs are more of a challenge and therefore worth more experience to you. (However, they are likely highly resistant to your spells and will take little damage from you!)
If the overhead name of a player is yellow to you, this signifies that the unit in question is unfriendly to you and that you can attack it (their PvP Flag is on), but you do not currently have your PvP Flag on. When you engage in combat with them, their names will turn red and your PvP Flag will be turned on. If the overhead name of a Mob is yellow to you, that means that it is non-hostile and does not have an aggro radius. However, if it is attacked, it will fight against its attacker. If the overhead name of an NPC which is part of a Faction is yellow to you, that means that you are currently Neutral with that Faction.