This is a potentially very serious usability problem with iOS 5. Read Marco Arment’s blog about the change in how iOS 5 handles the Caches directory.
Personally, I always leave at least 1G free on my 16G iPhone. That seems mandatory now. How do we get the word out to all iOS users until Apple fixes this problem? Or perhaps Apple doesn’t think this situation is likely to result in the kind of disappearing files that Arment fears.