I use Yubikey as well - currently with LastPass, a password manager that works on Linux, Mac, Windows, iPhone, Android, etc. More applications (web and other) need to support two-factor - currently Fastmail is an email service that supports Yubikey.
The only issue with Yubikey is that it requires a USB port so there's no way to use it on most smartphones, many of which don't even have a USB port. Same goes for some Internet cafes that don't allow USB devices to be plugged in, and some corporates perhaps. The great thing is that it does work without drivers for any computer that has a USB keyboard interface.
Duo Security might be a better option for desktop and phone use. It is more or less a superset of Google Authenticator, with phone/text callback as well as smartphone apps, but also has the option of a hardware token with display for the random passcode.