Hydration packs make taking on water whilst on the bike much easier than fumbling around with bottles, with a straw fastened to your shoulder strap making the drink easily accessible at all times.
The packs are common for cyclocross riders or mountain bikers who usually have to deal with difficult terrain and won't be able to take their hands off the handlebars for long enough to grab a bottle, drink and replace it. On longer rides or downhill sections it may not be practical to stop every time you need a drink, making hydration packs like these an ideal solution.
Big Bottle Little Bottle
The size of the hydration pack you use depends entirely on how thirsty you are and the duration of your ride. The shorter the ride, the less water you will need to take with you, unless it's a really hot day. When you are mountain biking it's always a good idea to overestimate the water you will need as you may not be close to anywhere to get more. Hydration packs are also useful for storing energy drinks for easy access whilst on the trails so you can keep going for longer.
Hydration packs come in a range of sizes from the modest 1 litre to ones that hold more than 4 litres for the super thirsty. Each one has it's own ideal purpose and will help keep you hydrated on the bike.