So far I've been happy with my Altura Skye Panniers - they're the nylon cordura type with a pull-out 'waterproof' cape, with a sprung clip, hook and rail system. I've only used them for three months commuting so I can hardly claim it's been an exhaustive test... without the cape in use they've held up to an hours light/moderate rain with the contents still dry. With the cape in use they've held up to an hours moderate/heavy rain with the contents still dry. I haven't tried them under truly heavy rain or for longer periods, so I don't know about touring.
Michaels points about the welded type of pannier are good advice - breathability goes out the window.
It's also worth thinking about how long you're going to be out in the rain for - whilst you might not ride for more than an hour or two in heavy rain, you might not be able to get you're bike undercover afterwards.
Richard
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Currently riding an MTB with a split personality - commuting, touring, riding for the sake of riding, on or off road :)