I used a backpack as a pannier for a short ride, hanging the backpack from the top loop from a spring loaded clip (I think it is called a belay) from the other side of the wheel. I know that was not the best way but it worked in a pinch.
I wonder if large backpacks like the Jansport Superbreak ($20 when on sale) or Jansport Big Student which have about 35-30 L capacity can be equipped with hooks, plastic sign panels inside and other hardware to be used as panniers. Has anyone tried it? It is hard to cough up hundreds of dollars for bike luggage.