What's the advantage of using yield in __iter__()?

What is the advantage of using an generator(yield) inside an __iter__() function? After reading through Python Cookbook I understand "If you want a generator to expose extra state to the user, don’t forget that you can easily implement it as a class, putting the generator function code in the __iter__() method."

import io

class playyield:
    def __init__(self,fp):
        self.completefp = fp

    def __iter__(self):
        for line in self.completefp:
            if 'python' in line:
                yield line

if __name__ =='__main__':
    with io.open(r'K:\Data\somefile.txt','r') as fp:
        playyieldobj = playyield(fp)
        for i in playyieldobj:
            print I

Questions:

1. What does extra state means here?
2. What is the advantage of using yield inside __iter__ () instead of using a separate function for yield?