Perhaps the core justification for packets, Baran’s concerns about node failure notwithstanding, is that the same link can carry, at different times, different packets representing traffic to different destinations and from different senders. Thus, packets are the key to supporting shared transmission lines; that is, they support the multiplexing of multiple communications channels over a single cable. The alternative of a separate physical line between every pair of machines grows prohibitively complex very quickly (though virtual circuits between every pair of machines in a datacenter are not uncommon; see 3.4 Virtual Circuits).
From this shared-medium perspective, an important packet feature is the maximum packet size, as this represents the maximum time a sender can send before other senders get a chance. The alternative of unbounded packet sizes would lead to prolonged network unavailability for everyone else if someone downloaded a large file in a single 1 Gigabit packet. Another drawback to large packets is that, if the packet is corrupted, the entire packet must be retransmitted; see 5.3.1 Error Rates and Packet Size.
When a router or switch receives a packet, it (generally) reads in the entire packet before looking at the header to decide to what next node to forward it. This is known as store-and-forward, and introduces a forwarding delay equal to the time needed to read in the entire packet. For individual packets this forwarding delay is hard to avoid (though some switches do implement cut-through switching to begin forwarding a packet before it has fully arrived), but if one is sending a long train of packets then by keeping multiple packets en route at the same time one can essentially eliminate the significance of the forwarding delay; see 5.3 Packet Size.
Total packet delay from sender to receiver is the sum of the following:
Bandwidth delay, ie sending 1000 Bytes at 20 Bytes/millisecond will take 50 ms. This is a per-link delay.
Propagation delay due to the speed of light. For example, if you start sending a packet right now on a 5000-km cable across the US with a propagation speed of 200 m/µsec (= 200 km/ms, about 2/3 the speed of light in vacuum), the first bit will not arrive at the destination until 25 ms later. The bandwidth delay then determines how much after that the entire packet will take to arrive.
Store-and-forward delay, equal to the sum of the bandwidth delays out of each router along the path
Queuing delay, or waiting in line at busy routers. At bad moments this can exceed 1 sec, though that is rare. Generally it is less than 10 ms and often is less than 1 ms. Queuing delay is the only delay component amenable to reduction through careful engineering.
See 5.1 Packet Delay for more details.