I use racks and bags, but I invested a bit into them. I think that if you buy high quality stuff, this is the best system, but it also benefits from a certain type of bike. Many old MTB's had great platforms for building loaded tourers, and if your frame has the capacity to securely attach decent racks, and it has long(ish) chainstays you would probably be pretty happy with this route. Its nice to have a bike that handles normally (if a bit slower).

On the other hand, trailers can turn any bike into a tourer, and the extrawheel trailers that use a second front wheel look pretty great. I would maybe look into those if i was considering the trailer route. I hear good thinigs anyway...