Another note to not cheap out on the panniers. I bought a really cheap set of M-wave panniers for like 20 bucks shipped. They will more or less get the job done, but they mount with straps vs. clips (most higher end panniers clip on to racks) and when I had mine on the bike, they would often go out of adjustment and eventually, the weight pulled them into the spokes and tore the back panel off of the bags. It sucked.

I went and got some LG bags on a really good clearance deal, but they are on sale for 75 bucks here:

http://www.performancebike.com/bikes/ProductDisplay?storeId=10052&langId=-1&catalogId=10551&productId=1091739&cm_mmc=$%28referrer%29$-_-E-Stores-_-LOUIS%20GARNEAU-_-40-4615&CSE=GooglePS&mr:trackingCode=74AEA58D-1DCA-DF11-98FF-0019B9C043EB&mr:referralID=NA

They are worlds better and come with rain covers.