In reverse order, Ortlieb (brand) makes wonderful panniers. I prefer waterproof panniers (like Ortlieb makes) so I don't have to worry about damp clothes after it rains, and they have easy-on, easy-off hooks with stabilizers down at the bottom so the panniers don't sway (although that's not as big a problem as I originally thought it would be). Most panniers fit most racks; exceptions are big fat tubes on the racks, which skinny mounts on the panniers don't work with (e.g., 1997 REI Novarra Randonnee bike with rear rack and Randonnee panniers that didn't fit the rack), and some panniers have specific lower mount requirements that not all racks meet (e.g., shock-corded clips and nothing to hook to). Yes, you'll need a rack to use panniers. Probably one per bike, as you'll want to mount it with screws and thread lock. You can get 'em cheap from PerfNashbar, or get something like Tubus racks that'll last forever.

Call up Wayne at thetouringstore.com and ask for specific recommendations. He should be able to help with how to mount which Tubus rack to the bike, and will know the dimensions of the panniers. Good guy to work with.