Thanks for all the tire suggestions!

I thought perhaps my choice of Pannier was bad? I was using Ortlieb rollers.. I've since learned these panniers might only be appropriate for the road, or I will need to rig an additional attachment point to keep it from bouncing..

I just ordered the Nashbar waterproof panniers, those have the bungee attachment, they're suppose to attach the pannier more securely onto the rack..

I rode the same trail the next day with my alu mtb and it was night n' day difference... I think I'll get larger tires for the touring bike...

Barrettscv: When you had the 38c Marathon Crosses, were you able to still fenders?

Well at least I got some pics of the bike from the ride..