To those who updated their Apple products to iOS 5, on 11-3-2011, Overdrive released an update to the Overdrive Media Console that fixes the issue. Please download and install the new version of the Overdrive Media Catalog, and check for updates for iTunes.
I have tested it and the eAudio title I transferred did not go into the audiobook section like it used to. A playlist is created for the audiobook. In the update that released today, the name of the eAudio is now included in the transfer instead of random numbers. The newest version is 220.127.116.11.
If you are suffering any issues after updating to iOS 5, make sure to update iTunes and Overdrive and hopefully the issue will be solved. And no more random numbers instead of chapter titles!