I haven't taken the time to look through all the replies so my apologies if this has already been said.
But aside from the obviously amazing yoyo glitch and the effective edgeguard [esp against those who try to sweetspot since...well they can't if your yoyo is sitting over the edge spinning], a cool use for the upsmash is mostly useful if you're good at predicting aerial attacks from your opponent. This is especially effective against characters who rely heavily on aerials [Ganon, C.Falcon]. If you know they're going to attack from above, if you time the release of the yoyo correctly it will create kind of a protective fence, especially since the yoyo is a disjointed hitbox, if you can nail the opponent before their attack hits your body, your yoyo will win EVERY time. Now depending on where they are in relation your yoyo [above, diagonally in front/behind you] and how much damage they have, that will determine whether you follow up with a bair, nair, utilt, grab, etc.
as for an upsmash combo move, it's just a two-hitter but it's a **** effective one. Unfortunately the first requirement is your ability to predict and/or use mindgames to draw someone into it (unfortunately I've never effectively studied that last part to the point where I can give you a definite answer on how to lead someone into it...I just kind of see the opportunity and I do it...I'll try and record some matches so that when I land it again, I can give some more details].
SKIP THIS PARAGRAPH IF YOU DON'T FEEL LIKE READING THIS NEXT PART WHICH ISN'T ABOUT THE MOVE
I'm sorry for wasting your time if someone already posted this or if it's just common knowledge, but I only felt it's worth mentioning because a friend of mine, who would be a better known smasher if he wasn't working/schooling full-time and would probably be pro, has played regularly against some of the best Nesses in the nation [like AngryLobster] and he said he's never seen a Ness do this.
NOW! after all the babbling, here are the two hits:
you want to hit the opponent with an upsmash when the yoyo is about 45 degrees from the ground in front of you, then as soon as you can, bat the crap out of em. Sounds simple right? But as any Ness player knows, actually using the up-smash effectively [or even at all!] is a risky endeavor against anyone with skill.
NOTE: how often you can get away with trying/using this next two-hit combo heavily depends on the skill of your opponent. But whenever you manage to land it, it will be equally effective.
Another yoyo->bat combo that's really good against fastfallers [who are, by coincidence, typically your hardest fights] involves the dsmash and only works as a result of a mindgame. First: you have to be facing your opponent! Second: This is best used when the opponent starts out near the edge, as you'll end up sending them flying off which you can follow up with either a fair, a PK Thunder tailwhip, or a PK Flash.
If you're facing an aggresive player; Sheiks/Foxes[and some C. Falcons] are the biggest offenders since they're fast "smash'n'grab" [haha, not in the SSBM sense of those words] type characters who love dash attacks and think they can land any opportunity they want to take...which is all of them. Two keys which aren't difficult in theory, but in practice, not easy at all: Spacing and Mindgame
SPACING [which is crucial to whether you'll punish their aggressiveness or if they'll punish your riskiness]: if you know the range of your dsmash well, this will be infinitely easier to space. however far the yoyo would go out in front of you after the initial hit of the dsmash, that should be less than half of the distance between you and the opponent...shouldn't try it any closer than that, too risky and difficult to execute because it depends on your reaction speed as well. Although: the slower your opponent's character, the closer you can afford to try this.
MINDGAME: two words: CHARGE IT!!!!!! Everyone who doesn't use Ness just thinks he's slow and thus he gets written off as "too difficult to win with but easy as hell to beat" But Ness players know that he's grossly underestimated [effing GW, I almost wrote "misunderestimated"]. A Sheik/Fox see a Ness charging a yoyo that's behind him and they think you're begging to get *****. they'll almost always dash attack, or at the very least they'll run in for a grab. [NOTE: this is easier against Fox players because 1) his lasers have no impact unlike Sheiks needles and 2) his dash-attack isn't a quick lunge forward the way Sheiks is, which makes it easier to time] When you're charging, as soon as you see them make a move, release the yoyo, it will go in front of you before they get in range for their attack or grab, it will pop them up slightly [best used when they have medium damage] and they won't have a chance to really DI either since they weren't expecting to get hit and because they're stunned long enough for them to come down to the ground. And then obviously, use your bat! If your opponent has crazy good reflexes and manages to DI, the cool part is that if he DI's toward you, he still gets hit with the bat, albeit the inside/weak part, and if he DI's away from you, he'll get the tip, which is infinitely worse. As I mentioned, esp against slow-to-recover/fast-falling/Crouch-cancel-w.hore characters, this is best if done when your opponent starts out near the edge. It'll get batted over the edge and if he's close, run and shorthop off the edge and fair/nair them, if they're hit too far away for that, PK Thunder tailwhip or PK Flash from the stage.
I know I know, a whole lot of instruction for a move you will rarely use against good players, but it's just another Ace up Ness's sleeve that people won't expect and that they'll usually die from. I hope this helps SOMEONE. Jeez.
OH!!! one huge note:......................if they do an aerial instead of running at you...you're f*cked. =D
(but they won't! trust me!)