The goal here is to keep all valuables on you while traveling. But keep them concealed so you'll look like a local. I don't travel with a lot of technology. I keep my laptop at home and strictly use my smart phone while at a WIFI spot. I work in IT so I avoid taking work with me while traveling.
I currently recommend the Sony DSC-WX350 as a compact point and shoot camera. It takes great pictures and fits easily into any pocket. Point and Shoot cameras might be on their way out due to advancements in smart phone tech but I still feel they have some value while on the road. They offer a separate battery so your smart phone won't drain as fast. Point and Shoot cameras are relatively inexpensive in the off chance that it gets lost or stolen. And in the end I still feel that they take better photographs than smart phones, especially in low light situations.
Another option that is still compact in size is a mirrorless camera. You get most of the benefits and control of a DSLR in a compact and light body that doesn't take up much space in a day pack. The Sony a5100 with kit lens provides me an outstanding wide angle camera that allows me to capture beautiful landscapes as well as low light situations. Instead of carrying around a seperate camera bag, I place the camera in my day bag wrapped in a Domke Protective Wrap which allows for easy access.
Smart phones are great because they're small and provide a lot of entertainment in the long flights or train rides. They also offer Apps that can aid you your trip such as train schedules and local maps. Bringing a smart phone with me has replaced my need for a laptop. That means less weight and less overhead that could get potentially stolen. Every hostel I've stayed in has had public PC's you can use if you need it.
Below are a list of applications I use frequently on my trips. Especially CityMaps2Go. They're cross platform (iOS & Android) and they all have tablet versions as well. Check them out, most are free!
This is my most used app while over seas. It's a one time fee (currently free) app that allows you to download virtually ever map out there onto your phone. Once it's on your phone you can see where you are in the city and it doesn't use any data. Your phones GPS triangulates your location (which doesn't use data either). But remember, turn off your cellular data!
You could say this app is the very first step I take in planning a trip. I check flights and prices. Kayak makes it extremely easy to set dates, check times, and compare prices. With an easy interface you really get the full power of their web browser site at your finger tips. It also has some freebies like a simple packing list you can edit to your taste and a flight tracker.
Deutsche Bahn released their own app and similar to Kayak it's free, extremely easy to use and vital when planning your next days train departure. I use this app while at the hostel the last night of a city via WIFI so I'm able to see when I should be getting up and if there's any changes in the train schedule.
RAVPower External Battery Pack - This battery pack came in so handy on my 2013 trip. Adam brought it along and it was used to charge our cellphones a dozen times. This model has 3 charging ports, two 2amp charging ports and one 1amp charging port. There are other battery packs out there that charge faster and have a higher amp rating but the faster you charge the phone the quicker the battery will drain. Which is why you want a lower amperage to trickle the charge into the device.
This is a must for when you're stuck in an area with no convenient electrical outlets like an airport, airplane, or hostel.
ExOfficio Underwear - For Men/Women
Their site advertises that you can wear a pair of ExOfficio Underwear for multiple days due to it's built in odor shield, however I take 3 pairs with me and rotate out a pair each day. They dry extremely quick, around 1-2 hours of simple air drying. They also offer a full range of women's underwear and there are multiple reviews online about them.
Finally, they're actually comfortable. I've rotated 3 pairs without any chafing or discomfort. Pick up a few pairs and you'll cut back on vital space in your bag!
Okay so you technically need two bags, but hear me out. When heading into the city you don't want to take your luggage bag with you. You'll want something lighter for bringing along water, snacks, or recently purchased goods. A proper day bag is designed to be compact so it takes up barely any space in the main bag. I bring a day bag with me on trips for odds and ends stuff I might need while traversing the city.
I really like Rick Steves Civita Day Bag due to it's size, shape, and weight (only 9oz). With three zipper compartments, two water bottle pockets this day bag is enough to take on just about any day long storage job.