If this is a 3.3v device (which it appears to be) you should read this.http://playground.arduino.cc//Main/I2CBi-directionalLevelShifter
Basically, if you are not going to use a level shifter then you are trading off getting a high enough voltage for the Arduino to recognize it (by using pullups to 3.3v) against using too high a voltage and damaging the device (by using them to 5v). Note that I'm talking about the pullups here, not Vdd, which should only go to 3.3v
Good news is that it appears (from what I have read) that most I2C devices are pretty tolerant of 5v so if putting the pullups to 3.3v gives you flaky results you can try 5v.
I would be interested in Grumpy_Mike's perspective on this since he has way more experience than I do.