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Not only does a bike ride stretch your legs after hours in the car, it helps provide a lay of the land when you make a pitstop. Further, you'll absorb more local flavor (markets, parks, impromptu street performances) than is possible solely on foot. Finally, riding a bike is good exercise! (And who among us didn't eat just a little too much on our last vacation?)
Bike racks conserve trunk space but if you manage to fit the bike inside your vehicle you'll have less logistical hassle. Pro tip: Folding bikes like those made by Bike Friday take up less space.
See also: 20 great bike rides