Backpacks

Pros: Nice thing about backpacks, is everything goes with you when you hop off the bike.

Cons: The problem, is some people find it uncomfortable to have all the extra weight up so high on their body while riding. Also, they tend to make you sweat more, especially on your back.

Panniers

Pros: Trunks and panniers keep the weight lower on the bike, freeing up your movement. You can also potentially haul alot more with you, since panniers can easily offermore storage space.

Cons: Even though many panniers can be quickly removed, and used like a regular shoulder bag, it can be more difficult to take everything with you when off the bike. Also, it requires installation of a rack. Some bikes don't have eyelets, and some road frames have such tight triangles, racks just don't fit very well.