I use the manufacturer's clip for my onguard mini U lock. I've only ever needed one water bottle so far and I managed to fit it in there with one water bottle cage, so it works for me. Faster than dealing with bungies too.

I use the bike for errands and such a lot, and if it were in a bag I would be constantly forgetting it.

I'm still working out the damn cable that goes with it, I honestly just don't use it most of the time.