PBase

Is there a way to somehow reduce or reverse the effects of color photos that have yellowed over the years?

I have an HP3970

Your best bet is to learn about curves and then bring them into Photoshop or a similar program. You can then adjust the curves of the washed out data to get better results.

Unfortunately I have not seen any home scanners that will allow you to get the data from a scan at more than 8 bits per pixel if they did (similar to the RAW data from a DSLR) then you would be in even better shape.

If the picture is really critical then you might want to consider getting it drum scanned for just this reason.

It is also possible to boost up the levels on the scanner (I have a canon scanner) to increase the saturation of an individual color and then clean it up (fine tune) in Photoshop.

well, im using Photoshop CS and the HP scanner integrates into PS so I just import the image straight into PS but the scanner offers all sorts of color level options before you do the scan... I just dont know how to use them.

You can fix those photos within Photoshop. There are several different ways you can adjust the images, depending on the severity of the problem.
A good place to get some useful advice, and instruction is at http://www.retouchpro.com.
Also, a book by Katrin Eismann, "Photoshop Restoration and Retouching" is an excellent resource for fixing old photos.
She has a pretty good website at: http://digitalretouch.org