I recently bought an M-Wave 3 piece traveler from Amazon for $44. The top section is connected by clips and breaks away from the rest. It also has a little handle and shoulder strap and acts as a convenient laptop bag/briefcase. The other two bags drape over the rack, and can easily be disconnected and carried with a handle in the middle if needed. You can also purchase a separate rain fly for around $12 if you so choose. No complaints as of yet. Lots of pockets, big, cheap. Fits all my requirements .

btw, I definitely recommend panniers over backpack (especially for heavier loads). For me personally, backpacks were uncomfortable, hurt my back, and made me sweat more than usual.