I wear my water (camel back type) underneath my chest protecter. This keeps the water container from snagging on things. And the chest protector helps to hold the water in place, rather than the water moving the chest protector around in rough terrain.
I can carry all the tools, snacks, maps, etc... in a large MSR fanny pack.
I've ridden dual sport rides with a back pack before, and could not stand it. It really bothered me, but I know some guys who use them for trail riding.