One of the things I like about road and cross bikes are their drop handlebars. The mono-position flat bar of mountain bikes just doesn't do it for me. Drop bars give you so many more options. The question is then, where should your hands be and when?
As a junior, one of the first camps I attended at the Olympic Training Center in Colorado Springs, our coaches were adamant about keeping us out of the drops if the speeds were below 25mph. The theory being that when you're in the drops it closes off your chest limiting your ability to take full breaths and at those lower speeds the aero advantage of being in the drops doesn't outweigh the physical limit of being crunched up. Not to mention you have much more control of your brakes and shifters while on the hoods.
Which brings us to pack riding. If you're in the peloton and speeds are above 25mph should you then be in the drops? No. Like I noted above, you have much better control and can react faster to speed and direction changes if you're on the hoods. Not to mention the more upright position gives you a better view of what's going on around you and what's coming ahead up the road. The only times you should be in the drops is when your nose is in the wind at the front of the pack.
So in short, only ride in the drops when speeds are above 25mph and your nose is in the wind. The rest of the time you'll be much more comfortable and safer riding on the hoods.