I'm not sure I understand how the Yubikey works with Password Safe. There appear to be two different descriptions of how to set up a Yubikey to work with Password Safe: one at
http://www.yubico.com/applications/password-management/consumer/password-safe/which describes using the personalization tool to establish a challenge response configuration and create a 20 byte secret key, and another in Yubico's video, at
https://www.youtube.com/watch?v=m6bza2bXnz4where Password Safe is used to generate a secret key and write it back to the Yubikey.
I can see how the second method works: both Password Safe and the Yubikey share the secret when the configuration procedure is complete. However, in the case of the first method, I don't see how the secret key becomes known to Password Safe. If the key isn't shared, how can Password Safe verify the Yubikey response when a password database is to be opened?
BM