This is my first laptop so i don't know whether this is a problem or not.

After playing Warsow for 20 minutes i removed my flash drive and it was very hot so i checked the temps and here's what i got:

CPU (Core 2 duo T5550) - 45°C
GPU (GeForce 8600M GS) - 66°C

Running Ubuntu 8.04 64b

Unfortunately, yes. Laptops are frequently 62 to 69 degrees. See them every day in our shops. Some do run a degree or three higher with linux for some reason.

Thanks.

How hot can it get before it's in danger of being damaged?

User manual says "operating temperature: 0-50°C"

I would worry a lot if your temperatures exceed 69 degrees... but I don't like it if they exceed 64 degrees.
Clean out all cooling channels with a can or Dust Off or other treated canned air. If you have pets or a lot of particulate matter in the air, the build-up of dust and debris can happen quickly. I would clean the cpu, cpu fan, and cooling air channels every three or four months.
Sometimes it is worth the trouble to replace the current cpu fan, but some are impossible to get out...

Any excessive heat will reduce the life of any computer. I have seen laptops run for weeks at 74C, but that is not good.
Short answer. You can run hot if you have to finish a term paper, but I would not plan on it for more than a couple of weeks.
You might want to get a temperature probe to check what your comptuer thinks against reality.

It's hovering around GPU=65 and CPU=45. My acer Aspire 5920 has lousy ventilation. Are there any other ways of cooling it?