---- DDos Blackmail. Pay or your server goes down.
iThink - 7:21 pm on Oct 20, 2010 (gmt 0)
If you pay it once, you'll pay it again, and again, and again...
These criminals operate as groups and typically share lists of soft targets, the so called low hanging fruits. There are several "security" forums out there that are in this type of business. So once one gang has extorted money from you, others will make even higher demands.
Your best bet is to hope that they will just get bored/tired and leave for other low hanging fruits. Chances are that you will receive a few more threatening emails. Don't answer any such emails, instead prepare for a bigger DDOS attacks and hope for the best.