I posted a topic about this also a while ago. So far from what I noticed.
- Restoring the iPhone will decrease the "Other" to about 500-600mb. BUT, this is only temporary as it will increase in size again.
- "Other" is not affected by saved game or applications files.
- It is affected by music files. (Album artwork, lyrics).
Now what I found, was that I was using iTunes to find my songs album artwork. By doing this, iTunes will keep on copying and replacing these artworks every time you sync your iPhone. Even if you have the artwork, it will still copy it again. Hence, making "Other" increase. Since then, I cleared all album artwork that iTunes stored. Now my "Other" is only using 1.06GB for the past 1 month compared to 1.8GB. Before that, it would keep on increasing by 50-100MB everytime I sync. It's crazy I know, but I DO think its a bug in iTunes or iOS 5.
Note: When you use iTunes to find artwork, it does not actually save the artwork to your songs, it saves it somewhere else. When you manually add an artwork to a song, it actually save it to the song itself (which is way better because it does not take "Other" capacity).