Water should be carried in many small containers rather than one large one. In case of container failure you still have some water. They are easier to pack anyhow.

I prefer to drink from a bottle while hiking so that I can monitor/ration my water intake. My normal water budget is 1 pint for each hour hiked, 1 pint for lunch and 1 quart for breakfast or dinner. This budget needs to be adjusted for individual differences and weather conditions. You need a quart or smaller container of known capacity to stay on budget.

Water and food intake should be balanced regardless of how you carry your water.

“Camelling” or using your body as a water container works for some people. I my opinion you need to test whether it works for you, but it does not work for me.

Around camp you need to have at least one water bottle with these attributes:

Stable on uneven surfaces,
Durable enough to be dropped and survive cactus encounters,
Have a large enough mouth that you can add sports drink mix,
Light - Gatorade quart bottle is 2.4 oz. v Nalgene quart bottle is 3.9 oz
Compatible with common holsters including OR insulated bottle carrier,
Clear so you can judge turbidity, and
Inexpensive.

Either a quart or 20 oz. Gatorade bottle fill these requirements.

I prefer bladders for the water carried in my pack and in camp. They should have these attributes:

Be compatible with a hydration system,
Light - Platypus 2 quart bladder is 1.5 oz. v Nalgene 48 oz bladder is 2.3 oz.,
Have replaceable parts so you don't have replace the entire system when a single part fails, and Clear so you can tell your tea from your water.

For normal hiking I carry the following:

One Platypus Water Tank 2 for camp and extra carrying capacity,
One Playtpus 1 quart bottle,
One 1 quart Gatorade bottle used to harvest, measure and treat water,
One 20 oz. Gatorade bottle carried on a shockcord/cordlock on the pack shoulder strap and used as my camp cup - Swiss Miss cocoa tastes better shaken rather than stirred - sorry James Bond.

Bladder tips:

The spaghetti sauce that comes in jars can be transferred to a small bladder. The sauce can be heated by setting the bladder in a pan of water with the pasta.

For hot day hikes bladders can be frozen the night before and they will melt at about the same rate you drink.

An easy way to filter water into a bladder is to pull the bite valve off the hydration tube and attach the hydration tube to the filter output.

The cap on the Platypus bladders can be replaced with the standard soft drink cap. A soft drink cap with holes drilled in it turns a Platy into a pretty good shower. Also the Platy hydration tube can be attached directly to soft drink bottles.

The 2 quart capacity is handy because Country Time iced tea mix makes 2 quarts. A 1 quart capacity is handy to mix Tang and/or sports drinks.

Cut off the bottom of an old Nalgene or Platypus bladder and it makes a pretty good collapsible bowl.

Sanitation is very important for bladders and they need to be rinsed with a mild bleach solution after each trip. I store mine dry and empty. Some people store bladders frozen.

The best method I have found to drink at night is to have a hydration system next to the bag.

A bladder half filled with hot water makes a great hot water bottle.

When the temperature is below freezing blow the liquid in the hydration tube back into the bladder to avoid freezing.

When the temperature is below freezing the bladder (bottles too) should be stored upside down because water freezes from the top down.

If your have your bladder inside your bag at night to keep your water from freezing, do not attach the hydration tube. The pressure can force the bite valve off if you roll onto the bladder. I will not talk about how I know this.