I've traveled with both - my first tours were with panniers, but after I bought a Bike Friday for traveling, I switched to a trailer - since the suitcase that holds the bike on airplane voyages converts to a trailer. I have to say that for a fully loaded tour I much prefer a trailer; it doesn't change the bike handling as much as having all of the weight sitting on the bike. That said, depending on where I am touring and how much gear I need, you might find me on a bike with panniers, and you might find me with my trailer.
If you're interested in my reasoning, I've 'published' an article - http://PanniersOrTrailer.crazyguyonabike.com - that describes my choices, including the reasoning behind them.
If you're interested in my reasoning, I've 'published' an article - http://PanniersOrTrailer.crazyguyonabike.com - that describes my choices, including the reasoning behind them.