"Yo dude" is a term used by the confused wanna-be individual and is a hybrid of "yo" and "dude" (originally used by surfers, skaters, stoners, Californians). This individual is typically someone who feels the need to use slang from regions other than their own, someone trying to emulate a sense of cool. They are most likely trying to mask the fact that they grew up in Minnesota, Alabama, Texas, etc. This individual thinks that if they use socially accepted slang like "yo" and "dude" together, they will fit in and sound urban but laid back cool. This individual will tend to gravitate towards other slang like "stoked", "whack", "the bomb", "phat", etc.
Yo dude, this party is whack, let's g-o out of here!