Our man MT breaks it down:
"I talked to a member of the Warriors organization. According to this person, ESPN.com’s report that the Warriors were in hot pursuit of Yi on draft night a year ago provoked "great laughter" throughout the office. Not that they don’t like Yi as a player, but they weren’t manuevering that day to get Yi."
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Definitely head on over to Inside the Warriors to read the rest. I think it really just comes down to this which Marcus pointed out:
"It also must be noted that if the Warriors really are desperate for Yi, according to my first-hand experience with them, they would probably say they ARE NOT trying to trade for him. The reality is, you just never know what Chris Mullin’s thinking."

99% of rumors never happen, but 99% of them are fun to talk about.