Yafaray is a re-coding of Yafray. It is meant to be a continuation and progression of Yafray.
With Yafray, the integration with Blender is quite straightforward. However, with Yafaray is it not the case.
As of this writing, you will need a patched version of Blender to work with Yafaray. Also, you will need to have the full installation of the Python programming language on the computer too.
Yafaray works differently on Blender 2.4X. It has it own separate panel (via Python) for setting and defining parameters.
Yafaray appears to render faster than its predecessor. Also it sports some nice features too. For example, it is easier to create Blurred reflections using Blender (patched version). The rendering below shows an example of blurred reflection on the floor. Blurred reflection gives new possibilities for creating more realistic materials.