As I understand it, the high heat is less for pasteurization than it is for denaturation of the proteins. For making typical cheese, this would be the last thing you would want to do ... but for making yoghurt, it gives you a much thicker final product. Essentially, as I understand it, this way you get the proteins that you would get from whey ricotta along with the other proteins that you would get if you didn't denature the milk.
All I can say is that it really seems to work -- I heat my milk to 180°F (83°C) and hold it there for 30 minutes, then cool rapidly by putting the container in a sink with cold water around it to around 115°F (46°C), add the starter, and incubate overnight at around that temperature. (I use an inexpensive yogurt maker for the last step, so I am not sure exactly what temperature it holds.)
VERY IMPORTANT: In the morning, put the yoghurt in the refrigerator with as little disturbance as possible -- do not stir it at this point, or it will tend to separate badly. Don't ask me how I know this ...
If you want REALLY thick yoghurt, start with whole milk and/or add extra cream. The results are incredibly good! Note that because I use whole milk, I do not add any powdered milk -- I think that is mostly to try to add protein/thickness to a low- or no-fat yoghurt.