Harj, the point I was trying to make is why people sometimes refer to YC as an incubator. I think PG (above) is right that what people interpret to mean by 'incubator' is changing (for the better IMHO).
Responses to a couple of your points:
> the best term for describing us would be investors
This doesn't differentiate YC from Angels, VCs or even friends/family/fools (at some level). All it says is 'we put money in'. Clearly there are major differences between each category of investor so to say that 'investor' is the best description is a bit of a disservice to the package YC offers. I don't have any suggestions as to what would be better, but it's obvious to me that YC is more than just an investor.
> because we do so much more for startups than what investors have typically done
I think I understand where this is coming from but I'm pretty sure there are (or have been) some great investors who do a lot for their investee companies, on par with elements of YC. However, what YC has done, is to repeat the best elements at a scale not achieved before.
