piatkow - 7:11 am on Jul 25, 2009 (gmt 0)
Then are the old backlinks still valid?
Most probably but depends on how things are arranged by your hosting service.
Would it appear as two sites in google now,
Yes but I think there are ways around this in Webmaster Tools.
My head hurts
I had similar problems a while back, I ended up moving the site to paid hosting with the company that managed the domain.