I use 'em both. For short trips around my campus, either to class or on various errands, I'll just throw everything I need into my backpack and wear that. You just can't beat the convenience of that. But if I need to ride into town or any more than a couple of miles away (like to work, for example), I strap my panniers to my rack. That goes double if I need to do some shopping. And now that I have four panniers and two racks, I can do a LOT of shopping on my bike .