1. A full size nalgene works in the side pocket and while it is easy to take out, it is more difficult to put back in without taking the pack off--which is true for just about every pack I've ever used. I suggest getting a hydration reservoir--it upped my water intake about 200% just because I never have to take off my pack to access my water. For example: http://www.backcountry.com/osprey-packs-hydraform-hydration-reservoir
2. When you have a nalgene in the side pocket, you can feed the compression straps underneath/inside the side pocket. That will allow you to use a nalgene AND compress the bag at the same time.
3. This pack is superb on a bike or on a hike. Because of how close it fits and how it moves with you due to the lack of a frame, it really rides well by keeping the center of gravity close to your body--I know a lot of people love this pack for longer mountain bike rides. And this pack is also a great go-to for day hikes.