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Replacing the motherboard means Windows will have to be reinstalled (unless it's the same model of motherboard), but there's no reason they can't back up your files from your hard drive. As long as you let them know exactly which files and folders to keep they can't tell you that they can't be backed up. :p
If it's a warranty repair, I don't see how they would replace the motherboard with anything other than the same model. Besides, I've had cases where Windows manages to boot after replacing the motherboard with a different model.
As said before, they're lying if they say there's no way to get your data before they reinstall. As long as the hard drive isn't broken, it is always possible.
If they claim not to be lying, the only other option is that they're very incompetent.
We're thinking we might send it to the magic Kentucky people that fixed it before. I'm assuming that the motherboard was the problem the last time, too, and if that's the case, then they must've just replaced it. And it fried again. In a matter of months! Do I really want another bad motherboard?