Many people get confused about Xenosaga's structure. About the episodes, not sure about Xenogears being the 5th episode of the Xenosaga Series. Here I will tell you all that I know about this issue.

Xenosaga is a six episode story. It is told over a period of approximately 15 000 years. The game that come out in Japan on the 28th of February 2002 is the 1st episode of this huge SAGA (Xenosaga: Episode I 'The Will To Power'). The game released on PlayStation few years ago, Xenogears is the 5th episode of the Saga (the prove of this is the fact that when you pass the game, when it says THE END there is also "EPISODE V" written on the same page, and it is nothing that developers are trying to keep a secret, so it's TRUE).

It is also TRUE that one of Monolith (Xenosaga developers') staff said that Xenosaga and Xenogears are a different story, but the reason I believe he said that is because it is happening so long before Episode I and he did not realize that people may think that we were talking about the game belonging to the same Saga. It is much like Star Wars movies. If you were to ask, director of the film would probably say that Phantom Menace and Attack of the Clones are two different films. Same thing happened with Xenosaga and Xenogears.

However note that this is only my own opinion, nothing official.

Also Monolith soft is planning on releasing one episode each year. It is believed that they will all be PlayStation 2 titles. Hope this explains things a bit.