I almost hate to get involved (for fear of getting dragged into the "cat fight") but it's too cold and rainy today for a bike ride, so WTH, I'm in . I'm not a huge fan of riding with a backpack (but frequently ride with a very "Fredish" fanny pack ). However, with fuel prices the way they are, I'm more and more inclined to take a bike for in-town shopping trips. I do have a biking specific backpack (never used) and a messenger-type bike bag (also never used) . What I'll likely use and I guess recommend, is a teardrop style pack with a single padded strap that snaps into either side of the base of the pack. I guess sort of a cross between a true backpack and a messenger bag. The beauty being it can be worn on one's back while riding then worn across one's chest while shopping or just walking around sight seeing. Comfortable in both modes. Depending on the shopping area, might be a security plus!
Another thought for the OP. It was stated that the kids are now "older". Perhaps THEY can have their own small backpacks to carry their books home from the library!