I’ve never had a “traveling sketch book”, but I’ve owned typical sketchbooks. For traveling, I recommend getting one that is small and light – perhaps a 5×7 or 8×10 size. Make sure you actually get a sketch pad with textured paper rather than a spiral notebook or something similar. For the medium, I recommend using an Ebony pencil, conte crayons/pastels or any other soft lead. These are best for quick sketching and gestures.

With regards to a watercolor sketchbook: I also haven’t had experience with this, but I have done quite a bit of watercolor painting and I would advise against traveling and painting with watercolor. It can be messy, take some time to set up, clean up, and dry.

I recommend moleskin products for the travel writer/artist. Great binding, sturdy cover & nice quality paper.
http://www.moleskines.com/

They also offer watercolor books.
http://www.moleskines.com/moleskine-watercolor.html

If you’re going to be using it heavily and moving it around alot, I would avoid spiral backed books if you’re a fan of pencil. I am a big fan of taking my sketchbook everywhere and the spiral ones allow for a lot of smearing. Even the the more solidly bound sketchbooks smear a little but not nearly as much as the spiral. Pencil is just a tricky tricky medium.

If you want to keep a watercolor sketchbook, get one with 140 lb. cold pressed paper. Thinner paper with no grain doesn’t take the paint well and will crinkle up. If you want to use thinner paper, you can do sketching with water insoluble ink pens and just put in some light washes of color. I ususally bring a variety of sketchbooks and use different ones depending on whether I am really just shooting to do a pencil or ink quick sketch or looking for a more permanent work. Any good art store should have a variety of sketch books or you can look online at cheapjoes.com. I occasionally treat myself to really good handmilled paper sketchbooks from some of the French mills like Moulin de Pombie who make wonderful textured paper that loves the paint.

From the moleskin site on their watercolor notebooks,

“200 gsm – 25% cotton fiber – cold pressed, identical on both sides, and specially created for Moleskine”

I have never used their watercolor notebooks, but I have 3 of their sketchbooks & journals & I love them.

If you don’t want your sketches to smear make sure you buy a good fixative to spray over them. I use it on all my completed drawings. You may want to pick up some tortillons and a moldable eraser.

I’ve travelled all over with my drawings and keep everything in a pencil bag and a small accordion file folder.

I seem to attract quite an audience when I draw in public.

Perhaps watercolor pencils would be your best bet for drawing on the go.

I carry one around everywhere I go..

I would make sure the sketchbook is comfortable to carry and big enough that you feel like you have enough space to draw in.

Also, I recommend bringing a case of lots of different materials. I have lots of graphite pencils, couple of fine black ink pens, sharpies, charcoal, some of those watercolor pencils and a brush.