I think panniers are worth it, particularly if you already have a rack and plan on keeping the rack once you're done bike commuting. I sometimes commute with my panniers, sometimes with a backpack, depending on which bike I'm on and my mood. I will say that just upgrading your backpack could help a lot. I just picked up an Ortlieb Velocity backpack and it's a revelation. Sooooo much more comfortable than my old North Face. It's also waterproof (my main motivation for getting it), which is something that may be helpful in a place like Portland. The benefit of a backpack is that they aren't bike-dependent.