Go to youtube and search for PS3 YLOD FIX by GILKSY. Also view his "Arctic Silver Application" video and his "Fluxing PS3 BGAs" video. Follow his steps to the letter and you will have a fixed PS3 system.
It cost me $40 US to buy a variable heat gun (Harbor Freight) and $10 for the Arctic Silver Thermal Coupling compound (Radio Shack).
You will need a very small phillips head screwdriver and a samll Torx head screwdriver. I took my time and did this in about 4 hours over 2 days (I went very slow to ensure I did not screw something up!)
So for about $50 bucks I "SAVED/FIXED" our PS3 - MY KIDS LOVE ME!