This was one of my first questions when I came to YorkieTalk. I had decided to get a Yorkie and was out shopping for supplies when several people asked me what breed of dog I was getting. When I told them a yorkie, they all make remarks about them being spoiled, yappy, mean dogs. Stories about how the got bitten, as children were frequent. I was so excited about finally deciding on a breed and hearing all this these stories made me depressed. The members of YT, on the other hand, never even heard these rumors, and assured me, that Yorkies are sweet. So what's up, I wondered, they do have a reputation, with people, but once you own one, I doubt if people are going to tell you what they really think.
There is probably truth to the rumors; I think training a small dog is every bit as important s training a large breed. I think people can get away with not being quite as strict with certain breeds, but because Yorkies are very strong willed, training is important, they must learn to respect your authority. By training, I don't mean just house breaking, I mean obeying your commands, and you have to take the time to teach them without making them aggressive or fearfull. However, many people think that because a dog is small, training isn't important, and they think loving means that the dog is the boss. You can pamper your pet, and still have rules.
One of the problems with children and yorkies is unless the Yorkie is around children frequently, I think he sees the child as a dog, and threat. Children tend to move in fast jerky motions and a Yorkie can see this as threatening. All it takes is one child to do something stupid and cause long lasting problems. To train a Yorkie, you also have to be smarter than them, and for many people this is a problem.

I think Yorkies are best for people who really wish to have a family member, and are willing to take the time to produce a wonderfully well adjusted pet.