S., take a deep breath. I know exactly how you're feeling. My son also has a diagnosis of PDD-NOS, and man it's been a journey to figure out the truth. PDD is the waste basket of diagnosis -- they put you there when the child doesn't fit anywhere else. Honestly, it does mean much.
First of all, even if it is autism, there are SO many things that can be done to help. The dietary changes others mentioned have been a cure for some kids. There are listening therapies, movement therapies and a variety of brain-based therapies. I know people whose children have grow up to be totally fine.
Secondly, there are other things it could be besides autism. I would highly recommend getting the book The Mislabled Child. It goes through many issues, and other diagnosis they resemble. Although some won't apply to her (like dyslexia) since she is too young to demonstrate symptoms. I have found this book invaluable for figuring out this puzzle.
Thirdly, I'm not a doctor and I cannot diagnose, but your daughter demonstrates symptoms of auditory processing disorder (APD). My son has this. We went through the same thing where people would say he is autistic-like, but not really autistic. He wanted to be sociable, no repetitive behavior, no hand flapping... but he talked late, did not respond when spoken to, and had inappropriate social behavior (i.e. he responded incorrectly because he didn't understand what was said). He also had echolalia. He has spent nearly 6 years in speech therapy in order to get caught up on delayed speech. Your daughter is too young to be diagnosed with APD, and she may not even have it, but you might have a look at the symptoms: http://www.squidoo.com/capd I figured it out before all the professionals did, and I'm a big believer in mother's intuition.
Finally, I'm here to tell you the "professionals" are not the expert on your child - you are. 2-1/2 years ago a neuropsychologist told me my son would never be normal and we should start planning for group homes when he was an adult. She totally missed the auditory processing disorder which completely skewed the results of her tests. We found out a few weeks ago he has traumatic brain injury. She missed that too. He is now undergoing neurofeedback therapy which will resolve about 80% of his issues. And even without neurofeedback I have had many educators say he is progressing so well, he would grow up to be just fine. In fact, he's gifted.
So don't let their scary diagnosis reports bowl you over. In your heart hold the highest vision for your child. I shed many tears on this journey, but in my heart I always knew my son would be okay. I am now writing a book to share our story. Too many families do not have hope, don't let yourself be one of them!