Originally Posted by
Capecodder
Well I was very excited when I picked up a pair of panniers today during my lunch hour till I got home. I installed them on the rear rack and thought, "that looks pretty good"..... Then I took it for a ride and that all changed. My heels hit the corners of the panniers and it drives me nuts. Is this how most of them are or is it just that these don't fit correctly? I might just return them and get a rack trunk.

Your frame looks to have fairly short chainstays. Most frames designed for panniers have chainstays of at least 43cm. Can you move the panniers further back on the rack?
You may also want to investigate other panniers with truncated corners to increase heel clearance.