Personally, I agree with Yahtzee's basic message: that "manly" characters actually have characterization, whereas "macho" characters are just barely pubescent, self-indulgent images of what a MAN looks like to boys roughly aged between 13-18 (may extend into 20's if they elect for a "hard-drinking, fratboy campus"). What I disagree with is the idea that these characterizations only apply to men - there are female characters out there who are just as awesome and yet as fallible as "Manly" men, and there are those who are just as shallow as "Macho" men: the epitomes of ball-busting femi-Nazi-ism that end up as sexualized and objectified (if not more so) as the "soft" female stereotypes they're trying everything save massacring a Miss America pageant to get away from. Rubi from "Wet" is definitely a textbook case of a "femi-Macho" character, what with having no characterization but being a mass-murderering, stone-cold *****. Likewise, the female characters from Gears of War 3 are just as "Macho" as the male characters, as they literally aren't different from the male characters save for their sexual parts: they comes across as fanboy-created genderbents of Marcus and Dom, so they can fantasize having sex with their copy-and-paste marines without being declared a "homo" by the other neanderthals.
I guess "Macho" can still be a unisexual term, since a Macho Man and Macho Ma'am really have no difference except one has a dick (inevitably rendered impotent by enough steroids to cause an elephant to keel over), and the other has tits (also rendered sterile by taking out all the fleshy innards to make way for enough silicon to drive Silicon Valley out of business), but declaring fleshed-out characters as "Manly" leaves just as complex female characters out of the loop: Chun-Li and Cammy aren't the female equivalent of Ryu and Ken just because they were the only girls in Street Fighter - they've been shown to be as powerful and characterized as the rest of the cast on their own merits, and aren't tacked onto the roster as "token love interests" for the guys, or eye-candy for the gamers (at least, not ENTIRELY eye-candy). Jade from "Beyond Good and Evil" is one of the best gaming protagonists - not best female gaming protagonists, but best gaming protagonists, period - because she's given as much complexity as a "Manly" protagonist, with the issue of her gender brought up rarely, if at all. (I'd give more examples, but I must admit I'm not one who examines each and every female character to dissect them for an internet post, and thus wouldn't want to accidentally namedrop one who's done feminization of the industry more harm than good) Thus, I think "Manly Characters" should be renamed "Human Characters" - as, after all, the point is to make the characters relatable to people by making them act human in their given situation, regardless of which gender they are.
I also highly disagree that these are the only two types of characters, period - after all, there are characters who fall flat for having too much of the whiny, angsty (Wangsty, if you will) ham-fisted "tragedy" to the character, and not enough awesome (or indeed, COMPETENT) moments to show they're actually adults, and not overage cry-babies. Likewise, there are also characters who swing between Macho and Wangsty, in the vain belief that doubling both quantities makes them doubly Manly, whereas it just makes them look schizo. And there are characters who have NO characterization whatsoever, either by being a mute, or having all their lines done so monotone that you may as well have replaced the actor with Stephan Hawking's voice synthesizer.
So in order to address this issue, I will decree the new categories of characters to be added:
* Pussy Characters: Actually a catchall between Wangsty characters, and characters who are always annoyingly happpy-go lucky, based on the virtue of being literally too stupid to feel sad. Mostly a problem for "Moe" girls and "Bishonen" boys from JRPGs and the like, as both have plenty of examples between the two sub-camps. For every person who finds these characters "adorable", I easily bet five or ten others will be rolling their eyes, gritting their teeth, and telling these stupid kids to grow the fuck up already.
* Split-Personality Characters: This doesn't deal with characters with literal split-personalities (as that's a sign of some characterization, and therefore a thousand times more interesting than the characters I'm about to talk about), but characters who think the best way to capture the perfect mix of being "Manly" is to combine the over-the-top, one-man-army murderfest of a Macho Character, and yet have them whine and moan and consider themselves to be bad like a Pussy Character. One good example that Yahtzee has noted is War from "Darksiders", who is the fucking epitome of WAR, and yet mopes as much as a Goth OD'ing on depressants (frankly, I think Death actually fitted this characterization a lot more, since Death is something one can immediately associate with Emo-Teens). Another is Nilin from "Remember Me" - as Yahtzee puts it, sometimes her lines are "quavering with emotion", and the other times she's throwing one-liners that would make Schwarzenegger and Stallone cringe (i.e. "This Little Red Ridding Hood's got a basket full of kick-ass!"). Either attitude is tolerable if kept consistently in the game, but switching between them at the drop of a hat is jarring and just not focused - much like the rest of "Remember Me", but that's another story.
* Blank Slate Characters: Basically, when the writer thinks "characterization" is too fucking hard, and forces the players to figure the character out for themselves. This worked better in the days when games didn't really have the ability to characterize a character (particularly those two sticks in Pong, or all those L- and T-blocks from Tetris) - but even then, they at least made the characters LOOK somewhat identifiable: Mario was a brightly-colored, happy-go-lucky, pseudo-Italian plumber who goes on wacky adventures in a kingdom with super-power mushrooms and turtle-dragon-things. Link was an elf-ish fantasy protagonist, on a quest to save the princess of the land (who has gotten a LOT more characterization and competence over the years than some OTHER Nintendo princesses I can think of) from forces of evil. Samus actually did the whole "space marine who kills the shit out of alien lifeforms" a lot better than Macho space-marines of today, since it's treated as cool professionalism (rather than as a dick-swinging contest), and you didn't know jack about the space-faring bounty hunter outside of the asskicking in their wake until the secret ending, where (ZOMG, PLOT TWIST!!!) the armor sheds to reveal you've been playing a GIRL the whole time! Even after the twist had gotten about as dated as Citizen Kane saying "Rosebud", Samus is still one of the most progressive females in gaming (and again, one of the best characters of gaming of EITHER gender) BECAUSE she's taking on a cool, professional role compared to the overly emotional gits the industry has begun to champion. Except for "Other M", but I prefer to think of it as a bizaro, alternate universe from the main cannon, where poor Samus IS treated as poorly as other female gaming characters, (as in "Not THAT Metroid where Samus is a badass, the OTHER M-(cut off by a fist entering their face)"). Unfortunately, a bad trend with the Blank Slate is a bad trend with the rest of gaming, one Yahtzee would define as "spunkgargleweewee"-ification: taking all the colorful, visually distinct elements that make the tone and characterization identifiable by sight alone, and making them an indistinct blob of dull pallets to claim an air of "realism" (i.e., the "Modern BORE-fare" series, where you play as an nondescript, English-speaking soldier, fighting alongside several other nondescript, English-speaking soldiers, mowing down thousands of nondescript Arabs/Ruskies as a personal "9/11 Revenge Simulator"/"Cold War Fantasy Simulator".
Right, that should be MORE than enough! But if there are some character types you think I've missed, or something else you want to discuss about this post, feel free to reply!