I took the plunge and upgraded to 5.0.2.
The installation went fine. I did not have the problem where the internal storage is permanently taken up by apps. If I delete a big app, I get the storage back. It is true that many fewer of my apps can be moved to the SD card, but I did not have any problems moving the ones that can be moved. When I moved all of them, the free space on my internal storage did increase --- just not by as much as I would expect from KitKat. One issue is that after moving an app to the SD card, its total storage can actually go up. I read somewhere that even after you move an app to the SD card, it still takes up some space in the internal storage. For small apps, it might not save any storage to move it to the external SD card.
The stock camera app cannot store photos on the SD card. I found one app that can do this: Snap Camera HDR. There are probably others. But even in this case it does not store the photos in DCIM. It has to store the photos in the Android/media/com.marginz.snap subdirectory.
Generally, managing the SD card is a big problem. Android 5.0 is supposed to have a mechanism whereby the user can grant permission to individual apps write access to specific directories of the external SD card. For example, I want ES File Explorer to have full access, and Rocket Player to be able to write to Music. When I go thru the steps for ES File Explorer, there is supposed to be a menu item that says "Show SD Card". This menu item does not appear. So, I cannot select a directory to grant ES File Explorer permission. This bug has been reported many times. I cannot post links yet, but if you google "issue 94083 android 5.0", you will see the problem.
This is a shame because most things are working fine. But this bug renders the external SD card nearly useless and the internal 8GB of storage is not much to work with!