It's really up to you as there are pros & cons to each. I'd fly, but that is me. You don't need all that much luggage. We went out of state with my 2 lots of times. I buy dipes when I arrive & don't pack too many. I nurse, so no bottles. Infant clothing is tiny so ti take up very little space. They make straps you can buy that strap your carseat to your luggage, so you take your own seats with you. Not only that, your child can ride IN the seat while rolling through the airport. http://www.amazon.com/Go-Go-Babyz-Travelmate-Luggage-Orange/dp/B0068IGSHM
We normally travel to see family, so I also just plan to do wash while I am there to reduce packing as well instead of packing for enough clean clothing for every day we visit. If you plan smart, flying with kids does NOT have to be hard - assuming you don't get bumped (we did & spent 10 hrs in the airport last time waiting to get on "the next flight" & THEN had to do an overnight & fly out in the morning). The kids were great about it though, surprisingly & we got comped for it, so it's all good in the end, but tough at the time.