I've played with a few things, none worked very well. Generally I just carry my little Cannon (SD800 IS, soon to be S95). It has a decent lens, OK optical zoom, and full manual control. The S95 has better optics and better manual (like a focus ring). I've actually been pretty happy and surprised with the SD800.

For SLR I have a small lowepro bag that'll hold 1 body w/ 18-200 zoom (or 50 prime or 85 prime or ...) that can go under my seat. I also have a twist up bounce that I can stuff in there. If I want lens options, strobes, etc then it's pannier time.