In a post discussing the upcoming MSN Spaces API, Dare Obasanjo writes:

After noticing the difference in the media response to the ability to get search results as RSS feeds from MSN Search and the announcement of the Yahoo! Search Developer Network it is clear to me that simply having great functionality and blogging about it isn't enough. To me, getting MSN Search results as RSS feeds gives me at least two things over Yahoo's approach. The first is that developers don't have to register with MSN as they have to with Yahoo! since they need to get application IDs. The second is that since the search results are an RSS feed, they not only can be consumed programmatically but can be consumed by regular users with off the shelf RSS readers. However I saw more buzz about YSDN than about the MSN Search feeds from various corners. I suspect that the lack of "oomph" in the announcement is the cause of this occurence.

Unfortunately however, MSN Search results in RSS format can't be considered a real Web API, since every RSS feed containing search results has a copyright notice containing the following:

These XML results may not be used, reproduced or transmitted in any manner or for any purpose other than rendering MSN Search results within an RSS aggregator for your personal, non-commercial use. Any other use of these results requires express written permission from Microsoft Corporation. By accessing this web page or using these results in any manner whatsoever, you agree to be bound by the foregoing restrictions.

So the advantages the RSS-approach could have over the Yahoo! API are completely nullified by the license. In fact, opening the following link in your non-RSS aggregating browser actually violates the license: this link may only be viewed in an rss aggregator. I would say this is the main reason developers are more excited about the Yahoo! API.

Update: Dare adds:

Mike Torres points out that both Yahoo (see YSDN FAQ) and Google (see Google API FAQ) have similar restrictions in their terms of use. It would be good to see MSN leading the way here. We've already gone one step better by not requiring developers to register and get application IDs. We should be able to the loosen the terms of use as well.

While it's true that according to the linked FAQs I can't commercially use the Yahoo! and Google APIs, I can use them personally for whatever I want, which is something entirely different than only being allowed to view the responses in an RSS-aggregator. For instance, can I write a Google/Yahoo!/MSN Search-combining tool and release it as opensource on Sourceforge? Perhaps Microsoft won't sue me for doing so, but that doesn't mean that creating an application whose sole use infringes on the MSN Search license is legal. So before MSN starts "leading the way", please catch up first.