I will get back with more detail and photos of the pannier clunking. We're running Arkel Orca panniers that use the cam-lock system. At the bottom, they attach with a bungie cord, which allows them to flop out a little bit (maybe 1/4" on bumps. I think the Ortleib bottom hook system is superior in this regard although I don't have personal experience with them.
There is a little bit of play in the cam-locks that allows them to bounce perhaps 1/8". No issue with them bouncing off or anything though as the cam-lock system is very secure.
The bottom part of the pannier has some hard plastic covering where is rubs the rack, to protect from abrasion. This hard plastic tends to make some noise on bumps.
Some electrical tape and pieces of old inner tubes taped on parts of the rack may go a long way in reducing the noise. So far I've done absolutely nothing to try and stop the clunking aside from complaining about it on Bike Forums.
Thanks for all of the tips, djb and Gauvins.