It shouldn't be lost, provided you don't format over your drive. It will probably also honour the entries in the Windows Boot Manager (BCD store) But that's something you need to check with Windows 8 upgrade documentation - if it doesn't you could always add it back manually.
However, if you care about your Ubuntu install, then it's advisable to back it up. You should do this anyway, because Wubi installs can get corrupted more easily than a normal install. What you should do is backup the entire
\ubuntu\disks directory. This contains the main file,
root.disk, the virtual disk and
swap.disk and then some empty subdirectories (unimportant). In some installs there may be other virtual disks e.g.
usr.disk, but normally there're just the two.
If you back these up it's easy to restore the install even if the upgrade fails.
Windows 8 works fine with Wubi - provided you don't enable hybrid sleep (not enabled by default). Fast start (which is enabled) is okay with Wubi.
Backing up a Wubi install
You can just copy the
\ubuntu\disk directory or the separate
.disk files to an external drive. Wubi installs Ubuntu onto virtual disks that are mounted as loop devices, but are just physical files on the host
FAT32 (Windows) "drives". So backing them up is as simple as copying the files to an external drive.
This isn't the most efficient way to back up a Wubi install since you're also copying the free space on the virtual disk, plus all the general OS files, packages, cache that you wouldn't normally backup. But the simplicity makes up for that.
If you need to restore from the backup you can just replace the
.disk files from your backup. This is also convenient when attempting upgrades or if you want to just play around with some things and are worried you won't be able to undo it later.
You can even reinstall the same release of Wubi and then replace the new
.disk files with the backups, but they either have to be on the same partition, or else you need to do a bit of manual grub booting the first time. See this for details: moved ubuntu folder from C: to D: drive how to correct UUID entries
It's also a good idea to maintain separate data backups which can be done as for a normal install, just focusing on personal data and settings. I prefer to use Ubuntu One to keep all data fully sychronized, and with data that doesn't have to be on the virtual disks, e.g. jpegs and mp3s etc., I store these on the /host partition or another mounted partition. This is the safest way to use Wubi, as there seem to be many cases of filesystem corruption that can lead to a full loss of the install.