Utility Cycling - Good pannier for groceries on mtn bike?

I've decided to try switching to biking to the local grocery stores (2-4 miles round trip) to get up to 2 standard paper grocery bags' worth of stuff, and am trying to decide what bag/pannier set to get. Since I live in Seattle, rain protection is a necessity, so I'm looking at panniers. I've included photos of the back of my bike, showing the clamp-on rear rack I've installed. I'm a bit concerned about potential clearance issues with the disc brake & gears. Right now, I'm looking at the Axiom Typhoon panniers as a reasonable quality/size/price point. ( http://www.axiomgear.com/product/bags/pannier_bags/product.php?id=406 )
Suggestions and any comments about your experiences are welcomed.

PS - I don't have to be able to fit an actual paper grocery bag in the pannier.

A pair of these fold flat baskets from Wald are ideal for your use.:thumb::thumb:

http://www.bikeworldusa.us/Wald-Folding-Basket-Rear-Rack-Chrome/M/B000OYFE7Q.htm?utm_campaign=froogle&utm_medium=organic&utm_source=froogle

Rain protection is as easy as plastic bag over the load.

Interesting idea! Do you know of any quick-release type mounting for the baskets (I'd like to avoid having them mounted when not riding to the grocery store)?

You are asking a lot of a seatpost mounted rack! MHO

Do you mean weight-wise? It says it's rated for 25 pounds, which should be plenty for my needs.
My general goal is to find something that I can quickly slap on the rack, ride it to the store, take it (or part) off the bike and with me into the store, fill that with my groceries, quickly slap it on the bike again, and ride home. It seems as though the Typhoon is pretty quick to mount/remove, and has decent volume (I'd like to be able to fit a milk half-gallon or a 2-liter soda; baguettes I'll break in half or have them stick out the top).

You are asking a lot of a seatpost mounted rack! MHO

Depends on the rack. I've got an Axiom Odyssee (http://www.axiomgear.com/product/racks/seatpost_racks/product.php?id=149) on my Utopia, and it carries groceries just fine with a TransIt Grocery Bag Pannier (http://www.performancebike.com/shop/profile.cfm?SKU=18210&subcategory_ID=2312) clipped to the rack - up to and including gallons of milk. :)

Unfortunately, it provides zero rain protection, so you'd need some garbage sacks to slip over the groceries. I'd also suggest a couple bungee cords or something to help cinch the stuff down so it doesn't go flying out on a bump.

As for a sealed pannier bag that carries groceries well, I'm not so sure, unfortunately. I think my wife has Axioms, but they're smaller and red, maybe Sirius or Jet Streams. Big thing is gonna be how low they go, but it looks like your rack is high enough that most panniers will be off your drivetrain.

Interesting idea! Do you know of any quick-release type mounting for the baskets (I'd like to avoid having them mounted when not riding to the grocery store)?

Do what I did for the wife's bike. Mount them with "P" clips and bolt & wing nuts. Takes a second or
two mount and unmount but it will not fail when loaded.

I`we got "hook on" baskets, like them alot. Around here many store sell re usable nylon ripstop bags to be used instead of plastic bags. I put my grocerys in them innside the baskets. They are good for light rain.

I would buy material and make raincowers if it was a problem. Maybe use the fabric from an old tent? You can buy raincowers for some panniers online or just a plasticbag upside down.

I like the baskets since I can take them innside the shop and innside the house easely. No need for re packing.

bm- do you have a model name or link for your baskets? It would be convenient to use the same type of reusable grocery bags you mention.