Go with the trailer. For one thing, youre getting very close to the load limit of most child bike seats40 pounds. For another, I dont like the idea of having a bike that top-heavy on any sort of trail. Also, theres a better chance of your childs head snapping around. If theyre sitting low to the ground, theyll be much more stable.
I concede that a bike seat is the cheaper option. Most, such as the Topeak Babysitter (topeak.com), are around $125. A good trailer, such as the Burley Solo (burley.com), runs $350. But the Burley supports more weight than a seat (75 pounds), offers more seating options for your child, has more protection for the passenger than a bike seat (roll cage construction), and can carry both the yougster and a range of other stuff you might decide you need. On trails, a dual-wheel trailer can pose challenges because the wheels are wider than your bike. If youre on well maintained trails it shouldnt be an issue, but youll want to keep that in mind.
The usual safety rules still apply: helmet for you and for the child (Bells Trigger works well, $30; bellhelmets.com), and make sure the helmet is snug and level. It drives me nuts when I see kids pedaling along or in a trailer or on a bike seat with the helmet canted way back so their forehead is exposed. Most impacts are in the frontal area of the skull, so the helmet must come down over the forehead.