Here's a tutorial by Marcus J. Ranum, who explains his findings (it's an interesting read anyway, but UDP packet loss is described in slide 33).
http://www.ranum.com/security/computer_security/archives/logging-notes.pdf
So definitely _you can_ tune udp receive parameters to make it fine, but once there's a runaway host generating lots of logs at wire speed, message loss will always be triggered.
What a great paper! Hilarious and insightful, though it's a bit dated now. Still, lots of great pull quotes like "One thing we have learned over time is that some log messages which nobody would consider security event messages may actually be the precursor-indicators of an attack." Great stuff. However, slide 33 is way off with regard to numbers. I don't know if it's a problem with the old hardware, OpenBSD, or some other parameter, but modern Linux kernels at least will definitely not see that kind of loss. I have yet to see Syslog-NG drop a UDP message because of a networking stack load problem. We verify this by looking at the sequence numbers from some of our most voluminous routers. What I have seen is Syslog-NG drop when the log destination gets backed up, like if writing directly to SQL. I've never seen a file destination drop a message due to overload.