Earlier this year I switched from my old Camelbak to the new Osprey Hydraulics. It packs nicely in my backpack (REI Lookout 40) and does bulge awkwardly like a Camelbak. I think it's a great pack. The lay-flat design is very comfortable and saves space in my backpack.

Here's the review post if you'd like a little more detail.
Osprey Hydraulics 3-Liter Reservoir Hydration Pack