A CO2 laser is actualy 10.6um (microns) not nm (nanometres), the yellow stuff you're seeing is probably the laser passing through molecules that have been ablated (vaporised) from the material that is being cut.
Beleive me.. a CO2 laser is not visible to the naked eye, which only detects from about 400nm to 750nm (0.4um to 0.75um). You can detect a CO2 beam as I have many a time by inadvertantly sticking your thumb near the beam whilst aligning optics... the smell of burning thumbnail is almost immidiately followed by an intense pain and a hole in your thumbnail (DO NOT TRY THIS... it was a low power CO2 laser).
I've seen medical piccies what CO2 lasers do to eyes... you'd be horrified.
[Edit]I know that a CO2 laser doubled is 4.6- 5.8um, but this is still WAY out of the visible range.[EDIT]