I've had no problems at all using rear panniers with my Bike Friday NWT. Handlebar bags are problematic, however, though I've found a small one which I can fit on. I've never attempted front panniers with any of my bikes, folding or otherwise. I've done some significant touring with my BF, including passes in the Pyrenees, mountainous parts of Mexico, and unpaved rail-trails, and it was no differrent from touring with my old standard touring bike.
Personally, I've never understood why some folks favor trailers. And since you specified 1-2 week tours, there certainly doesn't seem a need to carry a huge amount of stuff. Why shlep all that extra weight?