how much am I looking to support on the rear racks? Is is worth the price to pay for a nice rack or am I better off putting than money into the bike somewhere else?
Speaking of, are these ( http://www.rei.com/product/833203/seattle-sports-titan-1500-panniers-pair-special-buy ) panniers suitable? I've been looking at the Ortlieb Classics and while they hold a little more they are also significantly pricier.
Roughly, 20-30 pounds per rack. Most fully loaded tourists with four panniers, handlebar bag, have about 40-60 pounds total. Its best to have less if possible. But most folks tend to carry more than less. You may read about people carrying 100+ pounds of gear and/or trailers. But don't emulate those people. They would have more fun if they carried half as much. Try to get by with as little as possible. You won't suffer that much.
Most racks will work fine. The Blackburn racks listed above have been used for decades and are high quality for not much money. You don't have to spend hundreds of dollars for racks. $80 of Blackburn racks will last for decades of touring.
Most panniers will work fine. I use Nashbar mountain panniers. About $80 for four panniers. Used them for many years. As long as the bags attach sort of securely to the racks, they will work fine. You don't have to spend hundreds of dollars for functional panniers.
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