Funny you should ask!... I just did a DIY thread showing how to replace the rear wheel bearing:
Rear wheel bearing R & R - How to and why
I got the bearing assembly off of eBay for ~$100, including shipping.
...And yes, the noise you describe indicates your bearing is bad. The three I've replaced (counting the one on my Avalon) didn't sound or feel really bad at all. Only one of them made a slight clicking noise when I would spin them by hand.
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1992 Camry LE, V6 (3VZ-FE), ABS brakes, 330k miles, dark emerald pearl, owned since new.
1996 Avalon XLS, ABS brakes, moonroof, white, acquired w/ 139k miles, now at 261k.
2001 Yamaha FZ1, Ivan's jet kit, resprung all around, Ohlins in the rear, Race Tech cartridge emulators in the forks, 45k miles.
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