To quote the homepage of Modernizr:
‘Modernizr is an open-source JavaScript library that helps you build the next generation of HTML5 and CSS3-powered websites.’
To put it simply, its a library which tells you what your users browsers support and enables HTML5 browser structure tag support in older browsers (similar in the way HTMLShiv works).
Yepnope.js is built right in using the Modernizr.load() command so you can combine both feature detection with media queries and conditional resource loading. This will in theory help you to optimise your site for every circumstance without increasing your development time.
Modernizr is aimed at developers using the progressive enhancement approach and they should continue to use the progressive enhancement wherever they can. Using Modernizr is not an excuse to sacrifice accessibility for convenience or performance.
Getting started with Modernizr
With Modernizr 2.0 you can generate the version of Modernizr that you need using the Modernizr download builder so you can include only the features that you need. Alternatively you could use a CDN (http://ajax.aspnetcdn.com/ajax/modernizr/modernizr-2.0.6-development-only.js) link but from what I have seen the only CDN versions are uncompressed which adds useless bulk to the website. The best option therefore is to generate a version with just what you need.
Features detected by Modernizr
Modernizr detects many of the features in HTML5 and CSS3 including background-size, @font-face, border-radius, box-shadow, opacity, text-shadow, CSS Gradients, Canvas and HTML5 Video.
A full list of features detected can be found in the Modernizr documentation.
To round it up
Modernizr is a great script and should be part of every developers toolkit, while I do not advise using the structural elements of HTML5 unless you are going to rely on Javascript being turned on, the feature detection part of Modernizr is very useful going forward until we have all browsers we test in supporting CSS3 and HTML5.