" And do you need to re-waterproof the bag? If so, how? Is the nylon version waterproof?"
No. The top flap (which is also a pocket for rain gear) flips back over to cover the hooks. It's definitely a bit more comfortable with the rain gear in the flap(and my rain gear is permanently kept there) , but it's sufficiently comfortable on it's own.
I've just emailed Carradice about the cotton duck waterproofing issue, but I suspect at only 15 months commuting use I still have some way to go before it needs waterproofing. They make their expedition panniers from the same material. My wife has the nylon version, but she doesn't ride in the rain!