4 bags:
Handlebar bag - wallet, gps, camera, flashlights
Left rear pannier - clothing, stove, fuel
Right rear pannier - sleeping bag, repair gear, flat kit, maps, sandals, booties, toiletries
Backpack - food and utensils
This worked really well for me. The important points are having a handlebar bag with all the expensive stuff in it that you can just unclip and take with you when you go into a supermarket/resturant/etc and not worry. The other is the backpack which has all the food in it. If you are going through bear country (Rockies and Appalachians) it is good practice to keep the food separate from everything else so all you have to do is hang up/hide that one bag.