Will I lose my game saves when I upgrade to iOS 5?
The short answer to your question is no. You will not lose your games. However, you must know how to save them and how to bring them back after upgrading to iOS 5. A friend of mine with an iPod Touch had the same concerns about his saved Angry Birds data. I walked him thru upgrading to iOS 5 and this is how we did it: 


Using iTunes and an USB cable, we backed up the iPod Touch. Make sure you are running the latest version of iTunes (10.5 as of this writing). 
We upgraded to iOS 5 from the Summary tab for his device.
Once iOS 5 starts, on the initial setup screens (in the iPod Touch itself), we told the iPod Touch to restore from a backup in iTunes. 
We continued the rest of the set up as normal. We used his Apple ID to create an iCloud account. I highly recommend using iCloud. 
Once you're done with the initial setup, you can go to your device in iTunes and check on "Use Wi-Fi syncing for this device". You can detach the USB cable for good--This is one of my favorite features of iOS 5. 
In the iPod Touch, we went to Settings > iCloud > Backup and Storage to tell iCloud to backup this device. You can then manually trigger your first backup from that screen. 
Once backup is completed, your device will show up on this same screen as backed up. You can tap on its name to go to another screen where you can individually set which apps you want to keep in and out of your iCloud backup. This is very handy when deciding how to use your iCloud storage space. Most apps take very little space on the server, but there may be some apps that not, so it is worth to take a peek. This screen tells you exactly how much each app is using. Make sure to add all of your games that have data that you wish to back up. 


Next time you need to restore your device, iCloud will restore all of your saved games this way over the air, rather than having to restore from iTunes with a USB cable. Hope this helps.