One: where are the best places to set up camp? A book mentioned church yards, public parks, and even cemeteries. Can you set up where ever suits you or is there etiquette to abide by?
A number of places have already declared that they allow camping. On ACA routes, the maps will identify these places. If you go to one of them, you can certainly camp there. That would always be my first choice. Some are free. Some charge.
Of course, Warm Showers is another good option.
If you want to set up someplace else where camping is not obviously allowed, then it is always best to ask permission. On city or county property, the police station is often a good place to ask. On private property, ask the owner if you can find them. At a church, the pastor's name is often on the sign out front, or there is often somebody inside. Ask at fire stations, as they frequently have visitors. In the countryside, ask at the farmhouse.
If it is unclear who owns the land, or there is nobody around to ask, then I would try to find some place out of sight of roads and buildings, set up late and leave early, and hope for the best. Rarely would this result in anything worse than a request to leave, which you should politely and immediately honor.
I have set up in city parks without asking. It usually works fine.
This is a situation-by-situation thing, and you have to use your best judgement and experience. Watch out for hazards: sprinklers, dogs, bulls, falling trees, floods, etc. In all situations, leave no trace.
Only if you are quite desperate would I violate a no-trespassing sign. I have only done this once in a situation where it was too dark to safely continue and there was nothing else around.
Two: I am interested in the pros and cons of a trailer versus panniers. I will either be riding a '84 Fuji or '02 Bianchi, both road bike not tour bike specifically. My thought is that a trailer would eliminate the problem of not having the rear panniers centered of the axle. Thoughts?
There are many articles on panniers vs. trailers on the web. A Google search will yield articles that address pretty-much all the pros and cons there are. A good measure of personal preference is also involved. For touring bikes, I think panniers work best. For non-touring bikes, a trailer would often be a better option.