I think it must depend on your frame as well. I never feel my pannier on on my long, touring frame, whereas I do feel a pull when I'm wearing a heavily loaded backpack up high. As far as expense, Axiom makes a very cheap transit-oriented series I like called the "Mount Royal." You can get it for $25. Two sided, saddle-bags style.

Regarding all these Londoners with backpacks, it couldn't be any different in NYC. A good bit of totes and messenger bags on the train here. It's absolutely annoying when passengers get on with backpacks and leave them on, taking up twice the space on crowded trains. They have messages over the intercom that tell you to hold it at your feet. The worst: since your backpack lacks nerve-endings, you don't feel when it's prodding others. Ugh, sorry for the tangent here...