I use them and can't imagine traveling without them. I started with the Eagle Creek brand and they have held up for years with no issues. One of the advantages that I have found is that if security feels the need to go through your luggage or even if you need to get something out of your suitcase while traveling, the packing cubes keep all of your items together, making repacking easier. My 10 year-old son had his suitcase pulled aside on our most recent trip. The security agent opened his bag, lifted the packing cube of clothes, found his scuba mask sitting underneath it, replaced the cube, and sent him on his way.
As for what sizes of cubes I use, I use the Eagle Creek medium (M) cube for my t-shirts and pj's, the small (S) cube for underwear and socks, and the slim cube to hold my hair straightener, brush, and miscellaneous items in check. If I ever traveled with more than casual wear, I would definitely look into getting a packing folder as well.
All of my cubes are in black, but I did buy a bright red extra small cube (XS) to use for a minor emergency kit, so it is easy to locate. It has things like band-aids, an eyeglass repair kit, duct tape, a small sewing kit, pain relievers, etc. in it.
The Pac-It Sacs (different sizes) are great for keeping your seat items together on a plane (book, headphones, charger, lip balm, snacks) and are also moisture-proof, so they work if you need to bring a damp bathing suit or exercise wear home with you or if you want to protect items from moisture on a rainy day. They are also good if you want to keep all of your cords and cables together in one place (we travel with a USB hub with chargers for electronics, FitBits, etc.).
In the same vein as packing cubes, but an item that I don't see mentioned as much, are the personal organizer toiletry bags (
L.L. Bean has several sizes and their bags come highly recommended online). I have always just tossed all of my bathroom items into a random toiletry bag when I travel, but after my daughter traveled with us this last trip and brought her "improved" toiletry bag with her, I admit that I am sold. I will preface this by saying that if all you need when you travel is a toothbrush and a razor, then this might not be a must-have item, but if you are like me, being responsible for carrying all of the little toiletry items for your family that they expect you to have (nail clippers, file, dental floss, cotton swabs, make-up wipes, etc.) then this might be the kind of bag that you need. There is something to be said for arriving at your destination, unzipping your toiletry bag, and using the sturdy hook to hang it from the door of the bathroom or even the shower bar, giving the whole family access to the items they need inside. This is especially great during camping trips where the organizer may carry your bath items as well. If you have the TSA Pre-Check, that is even better, as your liquids can be left inside the bag without having to be sorted into a quart bag and are right where you need them when you arrive.
All this being said, would I consider packing cubes a NEED? No. People have been direct packing their items into suitcases for all time with few ill-effects and, let's face it, cubes are an investment. But, if you like the organization part of it, want to fit a bit more into your suitcase, or just want to make unpacking easier when you arrive, then cubes and other items in the various packing systems might be something you want to look into.