Step 1: find a new LBS. Overhauling a rear hub is really just routine maintenance. My LBS charges $25 for this. Telling a person they need a new wheel because the bearings need to be replaced is like telling a person they need a new car because it needs new sparkplugs.
Follow the instructions on Parktools.com and you shouldn't have any problems. After you have successfully done the rear, you should probably clean and lube the front as well. This should generally be done annually.