We really enjoyed YC. I've talked about it a bit in public, here:
http://slashdot.org/comments.pl?sid=234583&cid=19110535
And the blowback from that on YC News:
http://news.ycombinator.com/item?id=21907
We definitely didn't care much about the $15k (in our two-founder case), though it did nicely offset the cost of my move (I sold my 350Z at a rather unfortunate price, and found myself spending more than twice as much on rent as I was paying on a mortgage in Austin). And we're not college kids (we're 32 and 33). We were already selling product when we applied.
We viewed it primarily as a really good set of introductions, a good learning experience, and the chance to bounce our product off of the folks who would in the end be the primary users. Our actual buyers are hosting providers, but they buy what their customers want, and everybody in YC is a hosting provider customer, and probably a thought leader in some area of development.
We don't begrudge the 5% stake that YC holds, at all, and I think we've already gotten our equities worth from the deal, and we continue to take advantage of their advice. If it hasn't already been made clear by the above bits and other stuff I've posted on YC News, anybody that goes through YC has a really really good chance of getting funding, if they want it. Nobody who aggressively sought funding has failed to raise it...some folks figured out during the program that what they had was not fundable and so didn't go after more money. Others (like us) are biding our time a bit, as we sign on bigger customers and get ourselves into a really solid bargaining position before seriously approaching anyone. We have lunch with them when they call us (and they do call), but we're not asking for money yet. We'd probably take angel money at this stage, but the VCs zeroed in on us as the only enterprise business in the bunch, so that's who we hear from. ;-)
If nothing else, moving to the valley was probably the best thing we could have done (Austin Ventures is great and all, and they do a lot of deals...but there's just the one of them, versus hundreds of funding sources in the valley...if there's any chance you'll need money, the odds of getting it are vastly higher here), and YC forced me to make that move (my co-founder was already in Santa Clara).
It sounds like your situation is like Virtualmin's (including even being from Texas). They were in the last winter cycle. You should drop them a line; there's probably an email link at virtualmin.com.
In a few places I've seen PG mention that it is preferred that you are not already incorporated, but never that it is a requirement that you are not. The reason for the preference being that the custom legal work costs more for a group already incorporated.
Curious where you guys are in TX... Can you pls shoot me an email off-list? (email in my profile).
I wonder if this makes any sense for us to submit an application, since there are not 20, we're incorporated, we're not living in a dorm, we don't need $20k and we already have the product. The only thing we'd be interested in is well... good contacts (we're not in Bay Area) and business dev. consulting.