Like BNB said: Standard panniers on a tall rack: "
avoid heel strike by mounting a rack up higher than just above the rear wheel and setting the panniers towards the back of the rack."
Plenty of racks like that on the marked. You may want to look into a folding rack if you think you want to go small sometimes. A bike folded with the tall racks can be quite a lot bigger than standard racks:
http://store.bikefriday.com/index.ph...a2d7e&cPath=64
http://www.premiumbikegear.com/ternb...ertm-rack.html
On the other hand it is recomended on a 20" folder that you carry some (or even most) of the load in front. Partly becouse on a folder a bigger % of the riders weight is transfered to the rear wheel but also becouse most folders feels more stable with some load in the front.
My suggestion is to get the Dahon frontrack
http://www.flickr.com/photos/7265463...n/photostream/ and a regular low rack in the back and use a racktop bag or similar there (if that is enough for your need of course). No need to go for the small front bags with that rack unless you want to go offroad.
The second folder you linked to is a great looking bike but I think you may run into problems traveling with it. It is not considered a real foldingbike around here (too big folded) and therefor you may not be allowed on the trains you want and you may have to pay for the bike. A regular 20" (or smaller) bike in a bag is just "luggage" and free to travel with.