Snow Leopard 'Ate' My Hard Drive.

I installed Snow Leopard on Friday, and instantly noticed that my early 2008 model iMac was acting buggy. Never had a single issue with it before that day. Sure enough, less than 24 hours later I restarted and got the dreaded flashing question mark. After 3 hours of troubleshooting with AppleCare (including a complete - GULP - erase of my hard drive), they determined that my hard drive is toast and now I have to bring it in to a store for repair.

How does this happen?? I am no computer whiz so hoping someone out there can help me understand what, if anything, explains this. Also, (since I am sweating bullets and could not get an appt at the Genius Bar until late tomorrow evening) - can I rest easy knowing that my Time Capsule is keeping all of my data safe and sound? Call me crazy, but I'm a little paranoid now. I DID do a complete backup prior to installing 10.6. Has anyone had this happen and restored EVERYTHING via Time Machine? Am I stressing for no reason?

Man that sucks, but I can't see why the upgrade would cause the problem. It's a coincidence I feel.
Your back up should be fine.

Same thing here! I didn't even make it through the install.