This sounds like it could really be a problem for developers who store anything but truly temporary data in the Caches or tmp directory…
Every iOS app has its own “home” directory where it can store files. Every file and directory that an app puts there, except anything in a Caches or tmp directory, gets backed up when you sync your device to iTunes.
Prior to iOS 5, the system never deleted the contents of Caches and tmp, so they were safe places for apps to put data that should always be available but could be redownloaded if the user did a complete restore or otherwise lost all data, and therefore shouldn’t be taking up space in backups and slowing down syncs.
In iOS 5, since iCloud backups are now possible, Apple has started cracking down on apps that store too much in any backed-up directory, such as Documents.
Instapaper has stored its downloaded articles in Caches for years, since I didn’t want to slow down iTunes syncing for my customers or enlarge their backups unnecessarily, and full restores don’t happen often enough for it to be a problem for most people. This new policy now locks me into using Caches: I no longer have a choice.
But in iOS 5, there’s an important change: Caches and tmp — the only two directories that aren’t backed up — are “cleaned” out when the device is low on space.