Eagle Creek pack it system - hands down! I use both their "folders" and their "cubes." Check it out at http://www.eaglecreek.com/packing_solutions.html

The folders are especially great. Not only do they help save space, but they keep things organized.

I'm also a HUGE fan of using clear ziploc bags for toiletries etc. Prevents spills, good for going through security, and relatively cheap!

Happy packing.