Firstly... DAMN! Secondly... I survived YLOD. Just barely.
If you can, take your PS3 to a place that can fix YLOD (they should be able to reflow it). They normally don't give any guarentee on how long it will last... because it really is a bit up in the air. But it should give you enough time to transfer your data to a new PS3 at least.
When you have your new PS3, you need to use the data transfer utility (where you run an ethernet cable between your old and new ps3). It should warn you to disable your old PSN content first, which you should do. It's in your account management settings somewhere, and then perform the transfer. It takes a few hours depending on how much stuff you have.
Transfer is the way to go, because even copyrighted saves and other copyrighted data (excluding Singstar stuff) will be transferred and be usable on the new PS3. If you do it the "backup hd and restore to new hd" way, you WILL lose copyrighted stuff. Examples are the Demon's Souls and Killzone 2 save games. The only way they survive is with the transfer utility.
After that you should be good to go. Good luck.
