Thanks.... 13's (US) here

I'm using a Monashee backpack, which is basically a well-designed daypack, with raised padding on both straps and waist area. As long as you don't decide to take the kitchen sink along, it's not TOO bad on cooler days. I've been considering a change to a rack bag to keep the dreaded sweaty back away in the summer months, plus the air circulation is nice for keeping cool in general. MEC sells a decent rear rack for about $15 CDN, it's a welded aluminum Trace rack with no name tag, I've looked at both, and the same rack in the Trace bag is $25 at the LBS.
As for the bag, MEC also sells a Blitz Crag climbing pack for $20 that looks like it will fit well, why bother spending more for all the extra pockets and webbing we'll never use anyway? Slice the shoulder straps off, add a couple small bungee cords to the body of the bag, and you have a custom built combo with carry handle for off the bike.

Rack - https://www.mec.ca/Products/product_d...=1121008716844

Bag - https://www.mec.ca/Products/product_d...=1121008859520

Just got back from Home Depot... sorry but it's Panniers all the way!
With 2 bottles of liquid Fert., Bag of Grass Seed, Some Hooks, Electric supplies...
Not to mention my regular stuff...Lock, Water, Wallet, etc..etc.....

I even took the long way home to get a ride in.

I use 'em both. For short trips around my campus, either to class or on various errands, I'll just throw everything I need into my backpack and wear that. You just can't beat the convenience of that. But if I need to ride into town or any more than a couple of miles away (like to work, for example), I strap my panniers to my rack. That goes double if I need to do some shopping. And now that I have four panniers and two racks, I can do a LOT of shopping on my bike .

--- The pannier provides additional surface area to attach reflective tape and/or blinkies.

For light to medium loads, get a messenger bag, for heavier loads, get panniers, and for big loady-loads, get a Burley Nomad trailer.

Backpacks suk.

I have a similar set-up, only with bungee cords instead of a web. The Explorer panniers are a perfect size for commuting and errands, but I do wish they came with a shoulder strap or something so I wouldn't have to carry them by hand when I take them off the bike.

Arkel Utility Basket panniers for the heavy loads. Otherwise a messenger bag.

The question of backpacks versus panniers was covered by "Bicycling Science" MIT Press - 3 Editions now. Weight on the bike is less stress, then weight on the back and the rider with backpack has worse balance and a higher center of gravity. The lower the weight on the bike the lower the center of gravity, and the easier handling the bike. Rear packs without front packs causes servere handling problems due to the light front end, poor steering and poor aerodynamics. All panniers should be loaded tight or strapped tight to give the best balance. Front packs mounted low at mid axle improve the aerodynamics of a bike and the balance. Front packs cause slightly slower steering. Seatbags have little effect on aerodynamics. Small aerodynamic low front panniers with a large wedge shaped seatbag give decent balance and great aerodynamics. Carry a wide strap to hold it all together when off the bike and throw the load over your shoulder. The newer mounting systems are much more secure and each pack can be removed in about 2 seconds. I put my heavy bike lighting system battery in the seatbag to balance the front low rider panniers. Unless I am doing a major load I don't use rear panniers. My Trek 410, Sport Tourer, has only the front racks. I switch my seatbag with battery and NightRider light, each bike has a slip in headlight bracket, harness wires and I have a jack on each seat post, when I go to my MTB. My MTB has a rarely used rear rack, but I have an extra set of panniers, but for real loads I use a Bob Yak bike trailer - the bike with the trailer handles poorly without front panniers - so I always load the fronts when using the trailer.