Judging by the traffic at Madison's Saturday market, children's trailers work very well for cargo. Often, parents will have a toddler or two and a large pile of groceries. The two wheel trailers are very popular around here (saw at least 5 on my errands today) and handle well for city riding.
There's a thread knocking around in here about the Nashbar trailer. Verdict seems to be don't bother as it's not very sturdy. Given that, I'd shoot for a used children's trailer.