Do the $2.99 domain names from Yahoo carry any t&cs like domains have to be renewed with them, or you have to buy webhosting as well? It seems very cheap, even for a company like Yahoo.

Also, I have seen a couple of reviews on here saying Yahoo doesn't have good technical support. Has anyone had any bad experiences with them?

Well Yahoo doesn't have very good support at all, sometimes NONE. They say they offer 24/7 but there never available. Also ive heard reports people getting charged $1.00 more. Also I know they don't have a transfer function, so I don't know if you can even transfer out. So when they raise the price back up to 9.95 you will have to pay to reregister again. (just guessing on that)

I wouldn't use them for anything important, but for a fun domain name or one you don't really care about, you can't beat $2.99!

You can transfer out of Yahoo, and that should be done well in advance of renewal. Some people report difficulties, and that is where Yahoo's poor support can turn a simple problem into a struggle. Consider the value of your time, and maybe the $2.99 domain is not such a bargain.
Yahoo probably automatically works well enough most of the time. If it didn't they wouldn't get enough renewals to make a profit.

Cheers for your opinions. I decided not to go with Yahoo, because although I probably won't have any problems, for an extra $7 I could be sure I wouldn't have any problems.