I use both methods but the trailer for longer trips. I would warn people that the trailer approach is likely to make you take more than you need because "You Can".
A real disadvantage to my first set up was wind resistance. I had a large plastic lidded box on my Carry Freedom Y-frame trailer and in hindsite would not use the box again. It was great for keeping everything dry but the merest breeze would see me changing down gears to try to maintain my cadence.
I found the weight of the trailer (and wind resistance) slowed me down considerably and kept my daily distances much less than had I traveled with panniers alone. I toured with the trailer, front panniers and a rear rack bag (Ortlieb 31 liter) for my East to West Australia tour. Heres my Moulton APB with trailer (sans panniers and rack bag)



The Moulton cant carry enough water for Australian extended touring so the trailer is necessary.
I think when I arrived in Perth I'd learnt to carry a lot less food and water than when I started.
Now I just have my backpack strapped to the trailer.
I think the biggest tip for trailer towing is keep your heavy items (eg water) as low as you can manage
as it makes a huge difference to how the trailer handles.
A two wheeled trailer is king for tarmac towing (IMHO) but the single wheel trailers are what is best for off road.