probably not as competitive as before. The whole point of YC is to get contacts so its easier to get VC funding. And with the current economic situations and VCs being stingy most will probably wait for the market to stabilize

Not sure I agree that the whole point of VC is to raise VC funding.

The whole point of YC is to get connected with some great people and build something people want.

Agreed, but I also think it varies for the individual/team. Some groups gain mostly from VC exposure, some gain mostly by being able to talk to PG & Co. and others gain molsty from the smart people they're now surrounded by for three months (that was us).

We submitted our application earlier in the year but had another look over it earlier this week

I have submitted my applicaiton. But it has very low chances for getting through !