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In this paper we study the performance trade-offs between conventional cellular and ad-hoc peer-to-peer wireless networks. We compare through simulations the performance of the two network models in terms of throughput, delay, power consumption, per-flow fairness,impact of mobility, impact of traffic locality, and impact of node distribution on the network performance. The simulation results show that while peer-to-peer networks perform better in terms of throughput, delay, and power, they suffer from unfairness, and poor performance in the event of mobility and low traffic locality.We discuss the trade-offs involved in the performance of the two network models and contend that the trade-offs preclude the adoption of either of the network models as a clear solution for future wireless packet data networks. Thus, we present a simple hybrid wireless network model that uses a peer-to-peer network model in tandem with a conventional cellular network model. It supports a dual mode of operation and has the combined advantages ofcellular and peer-to-peer wireless networks without suffering from the disadvantages of either. We present simulation results showing that the hybrid network model outperforms the conventional cellular network model in terms of throughput, delay, and power consumption, and achieves better fairness and resilience to mobility than the peer-to-peer network model.