As to hottest genres right now. I see a lot of paranormal/spec fic romance as well. Young adult, with any genre (spec fic or otherwise) seems to be really hot.
According to Miss Snark, however, what is hot now is what they were selling two years ago. When you talk to an agent, they're trying to get you sold for a 2009 book release. So, yes, pay attention to what's selling, but don't be afraid to write what's on your mind. It it's hot now, it might not be hot when your book is done.
As to publishing. My WIP is finished, now I'm going to do my research on how to write a query letter. This is something I kept on the back burner. I knew it needed doing, but why bother with the query letter if you haven't written the book. Seems like you're getting things out of order. I googled 'query letter' and just bookmarked the first ten results so I can review them later. I'm sure I'll get a lot of good results.
Once the query letter is written, I'll hit the agents. Miss Snark says to query widely, or in other words, send your query letter to anyone who could possibly sell it. If you have written a young adult vampire romance set on a spaceship, you should query young adult agents, fantasy agents, romance agents, and scifi agents. The wider your audience, the more likely you are to sell. The worst you could do is waste the 41 cents for postage (wretched postal increase
!!!)
If all the agents reject you, you can either search again, submit on your own, rewrite your story, or work on the next story. I read that Jim Butcher wrote his Codex Alera books before Dresden Files. He had to sell Dresden Files, though, to get the Codex Alera books out. That happens.
Matt