Commuting - Luggage rack

Hi,

I recently bought this kewl folding Swiss bike (http://canambikes.com/Pages/LX24.html) from CanAmBikes.com.

Before that I had a fixed bike with disc brakes and I bought a specialized aluminum rack for it -- specialize to fit on bikes with disc brakes.

With the new folding bike, the rack won't fit when it is folded because the sidebars that go down to the back axle stick out too much.

I have seen those straight racks that only attached to the back seat post but had some questions about them if any of you have them;

First, are they effective as a rear fender? Or do you still have to use a fender?

Second, because they don't have any frame rails going down, what stops the saddle bags from bumping against the back tire and possibly getting sucked in and ripped apart?

And third, I don't see any adjustment where they attach to the back seat post so how do you know that your rear seat rack will be sitting straight or angled up or down?

Please help as this has caused me sleepless nights for weeks now :D

I also have my original aluminum rack for sale (http://toronto.craigslist.ca/tor/bik/638010973.html)if anybody needs one.

Seatpost angles are fairly constant so the seatpost clamp racks almost always end up horizontal.
Some have small side bars to prevent panniers swinging into the wheels. They can only take smaller weights and smaller panniers. If the pannier has a sound mounting system and good stiffening it wont touch the wheel.
Other racks to consider are the ultralight but very strong Tubus Fly which is very narrow (designed for fast touring so more aerodynamic). Old Man Mountain may make some which fit.
Montague (http://montagueusa.com/p_faq.html)claim that std racks fit the bike although you may need their special stays to the seat-tubes.