You will lose everything in internal storage; apps, app data, SMS mesages, Google account settings, wifi settings, etc. but you won't lose anything on internal or external SD storage (photos, music, books, etc.).
You don't have any choice with this ROM it will do a full wipe (factory reset) when you flash it anyway - you can't stop it.
A full wipe is not the same as a cache or Dalvic cache wipe. A cache only holds temporary files to speed up access so nothing permanent is lost by wiping it and the phone will rebuild the cache it as it needs to.
Sent from my Galaxy S2 using Westcrip's latest ICS