Does anyone else here use a smaller bag for commuting to work? If you use a smaller bag what are you sacrificing (if anything)? What do you take with you on your commute?

I see a lot of pictures with large messenger bags, panniers, etc. but don't see too many pictures of people with small bags. I see people on my commute that look like they are going on a extended tour but after striking up conversation I learn they are just riding to work.