Applying is free and can't hurt. But if you get rejected just remember that YC seems to use a kind of mold to decide if a company fits with their program. YC typically does not invest in pure technology or software companies (the kinds of companies that could be the next Google/Microsoft), generally preferring web-based apps that can be launched in 3 months or less. You can see the list of companies that YC has funded in the past at http://yclist.com. From that you can gleam whether you fit the mold.