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But yes it is more similar to MSN dynamic insertion. As in New Yahoo Search Marketing (upgraded account) you can have dynamic keyword insertion in the description also.
Well that helped me when I was into a project which has name of products to see on. I used dynamic keyword insertion or as you know: {KEYWORD:Default Text} in my title and description..... Hmmm it seems to be working for me.
Try on!
Unfortunately, there is no keyword insertion within the URL for tracking purposes.
But they do have some kind of advanced tracking feature where you can use it and it appends that data to your url and you can pull the OVKEY string and get the keyword used. They also pass some other data too.
It has seemed to survive the upgrade with Panama as I am still getting the data and I started using it before the change.
I actually prefer this more, because you don't have to change your actual url/ad to make use of it.