In my experience, a backpack is way more practial (your hands are free), and you can pack quite a lot of stuff in a 80-90 Liters backpack (if you know how to pack to save space).
For day-trips (e.g. hiking) you'd need a smaller, ca. 30 liters backpack (you can carry it on one shoulder even while carrying the big pack), and you can carry wallet, passport, cellphone, etc. in a small always-on-you bag.
In addition, backpacks don't catch much attention from potential luggage-thieves (unlike fancy suitcases), and second, if it's a quality hiking backpack, it's sturdy enough to survive all the manhandling the luggage usually goes through on a long trip.
Look for a backpack with detachable/movable top lid - you can stuff more things in it as the lid stays horizontal.
[ Edit: Edited on 12-May-2012, at 12:32 by anamarija ]