I have the YN560 and the Canon 430EX II. I'd say for a first flash you should stick with TTL and like ishdakuteb said a used 430EX II is the way to go.
As for the Yongnuo, I have found it to be excellent as a second, manual flash when combined with a TTL main flash. The Yongnuo S1 mode will flash when it detects another manual flash going off. In S2 mode it will flash when it detects a TTL flash going off. I have found both modes to work correctly as long as you use them in the right situation. If you use S1 mode with a TTL flash as the master the Yongnuo will go off but it won't show up in the exposure because it fires early (when it detects the TTL pre-flash). Likewise, S2 mode probably won't work if you try to trigger it with a manual flash.
In either case, the YN560 won't accept TTL commands from a Canon TTL master, it will fire as a manual flash even in S2 mode.
Yongnuo also makes TTL flashes like the YN565 and the YN568 which are comparable to the 430EX II if you can't find one used. None of those flashes has TTL master capability, but the newer Canon APS-C bodies have TTL master as part of their built-in flash (T3i, T4i, 7D, 60D).