There's a wide variety of bike-specific luggage options out there. You might think it's just another way for bike makers to extract money from you, but it turns out that proper selection from the wide variety of stuff-hauling options is important.
First, however, you must gauge your style. See, something that makes sense for one rider may not make sense for anybody else.
For example, if you are a bike messenger or another such person who is constantly getting off their bike, shackling it to something, and then running in and out of a building, you really want something that's going to attach to you, because otherwise it's going to just end up stolen.
On the other hand, if you are riding long distances with a significant amount of stuff, you really want to get most of that stuff lower to the ground, so your bike handles better and you don't strain your back.
And even if you aren't carrying lots of stuff, backpacks or messenger bags can get awfully uncomfortable.
There are a lot of options. Too many, in fact. I'm going to try and explain the options. Sadly, you end up with having more pieces of bike luggage than you need at any point in time. But then again, we've got a bunch of luggage for when we vacation and I've never seen us use every single piece we own, so it's not that bad.
The gold standard for racing cyclists is the bike jersey. Most of them come with a back pocket where you can fit an astonishing amount of crap. You can get fanny packs, which give you a little more storage room and don't require you to look like a racer wanabee, although I still think you end up looking awfully dorky.
There's endless variety of backpacks, both cycling oriented and otherwise. The problem with backpacks is that, while they give you a fairly comfortable amount of load handling ability and decent side-to-side balance, it's hard to get at their contents without taking the backpack off. This applies even to backpacks that are designed to be ridden by a cyclist who's hunched over the handlebars.
The bike messengers eventually created the demand for messenger bags. These are optimized for the tasks of a messenger, which means that you can get to the contents quickly but won't get in the way. They are generally designed to hug against the body of the cyclist so as not to swing about on the road. For tasks where carrying stuff on your bike is not acceptable, they seem to be much preferred over any sort of backpack.
However, because non-cyclists found the messenger bag to be useful, there are a lot of messenger bags out there that look and feel like messenger bags but do not function very well as messenger bags.
I'm not writing too much about these, because I'm not a huge fan of carrying stuff on my body.
It's usually good to have a small emergency kit with you all the time. That generally means a spare inner tube, a multi-tool, tire irons, a source of air, and maybe a few other items. I keep some bandages, duct tape, a spare leg strap, and a energy gel.
The best way to carry this is an under-seat saddle bag. There's a lot of variety here. Better bags will detatch with a cleat that screws to your saddle. Also, better bags will expand if you want to carry one or two more things. There are some fairly large bags of this type that are not at all aerodynamic. They generally have a tab on the back you can clip a light to as well.
You also want some way to carry food and water. There's a fairly standard bike bottle size and you can get a variety of bottle cages that will securely hold the bike bottle. There is often at least one pair of screw eyelets a standard distance apart that can mount a standard cage. Otherwise, you can mount them behind the seat or on the handlebars. There are various reasons why you'd put them one place or the other. The aerodynamics there are actually a little complicated so the competitive cyclists are always experimenting with different bottle configurations. See, you can't put an aerodynamic fairing on the bike, but you *can* put aerodynamic water bottles.
There are little wedge bags that can hold little things like energy gels, sports bars, cellphones, or small cameras that you can strap between the top tube and the stem for the handlebars. They were first intended for triathletes, but they are good for everybody. You can sometimes find slightly larger wedge bags that strap between the top tube and one of the other tubes.
Often times, you can take something that's got a belt loop and fasten it somewhere useful, often on the handlebars, even if it's not actually designed for the task.
Finally, there are handlebar bags. The big advantage of a handlebar bag is that you can carry a few pounds of stuff right where you can get to it. The downside is that if you load down the handlebar bag too much, it ruins your handling characteristics.
You can also get very large under-saddle bags that can carry much more than a standard wedge bag.
You can get a rack that attaches to the back of your bike, which is great for cargo carrying. You can even add a second rack for the front. The problem is that it's more of a basis for other bike luggage more than an end-all solution on it's own for hauling, so once you've spent the money for a rack, you've got even more money to spend.
If you are hauling boxes or other fairly large objects, you can just directly secure them to the rack. If you want to secure things to a rack, a bungee cord works great. There are also bungee webs you can get. The two popular designs are a web that has two plastic-coated hooks and another one that has four. I've got both and I use them in different situations.
The two hook bungee connects to the bottom of the rack. You can leave it in place and it will stay there, but you can't use it when you have panniers on the rack. The four hook bungee connects along the rail on the edge of the rack. It is loose if you don't have any cargo strapped down, but it also doesn't get in the way when you have panniers. When I was using a backpack, I had the two-hook version on the rack all the time for carrying my lunch. Once I started using panniers, I keep the four-hook version in my right bag along with some bungee cords for if I have to carry something big home.
The smallest sort of bag when you have a rack is a "trunk" that straps to the top of the rack. Most of them use velcro straps, but Topeak makes trunks and racks that specially mate. These are generally fairly small, so you won't be able to go shopping or bike camping with one. It will hold lunch and a more elaborate set of repair tools. Some of them are insulated like a cooler. Some of them have a bungee webbing up top to stuff a jacket. Most of them are fairly inexpensive.
Certain specialized handlebar bags are designed to mount atop a front rack shelf much like a trunk bag mounts to a rear rack shelf, although they are fairly specialized.
You can also move up to panniers that strap to the side of the rack. The best engineered popular option is generally the pannier bag, made out of either flexible plastic or various fabrics. There are "grocery panniers" that are designed to take grocery bags and generally are open up top, such that you can put a grocery bag in each pannier. You can also get a basket, sometimes even one that folds up, that does the same thing. However, with most of these cases, you will be paying more for something that's bulkier and less practical and doesn't actually hold any more cargo than a regular old pannier bag, so I'm going to concentrate on these.
The gold standard in Europe is Ortlieb, although in America some folks like Arkel bags. I've found that the reason why Ortlieb and Arkel are so popular is that most other panniers I've seen in the stores or tried to use are crap.
Now, whether it's a trunk bag or a pannier, there are important design points to consider.
The most important requirement is that the bag must not come loose. For trunk bags, two fairly sturdy velcro straps seems to be the standard, outside of Topeak's matching trunk bags and racks. For panniers, you can put two downward facing hooks on the top of it and a bungie hook on the bottom and it'll usually work, but might come loose when you least expect it. Better designs will contain a locking mechanism that won't come loose accidentally or break after a few uses, but still let you take the panniers with you easily. The good ones have a strap that you can use to lift the pannier off the bike that will release the locks, but it will clamp around the rail on the side of the rack securely when you don't lift the strap.
Another important requirement is waterproofing. Ortlieb makes their bags out of waterproof material and then plastic-welds the seams together. Arkel makes their bags out of a breathable water-resistant material. Waterproof bags take a lot more effort to get the contents wet, but they also don't drain or breathe moisture. Water resistant bags will start to let water in as the water resistant coating wears off and might let some in anyway, but they will let water and humidity out. Each zipper adds a path for water to get in, so Ortlieb tends to design their bags without any zippers on the outside whereas other makers tend to use mostly waterproof zippers or waterproof flaps.
You can also get waterproof covers for water-resistant bags. Either way, the safest thing is to keep stuff that can't get wet in a separate dry bag inside the rack, because even waterproof bags can get scraped up and develop a leak.
Finally, a bag must fit your bike and rack. Topeak trunk bags look awesome, but they require a matching rack. Otherwise, the trunk bags seem to fit most everything... although you can buy racks that won't mount a trunk bag. For panniers, this is not as easy as you'd think because racks come in all sorts of sizes and shapes, so often there's some adjustment screws that need to be loosened to let you fit the pannier to how your rack is shaped. Furthermore, some bikes have astonishingly short chainstays, which can put a larger rack into interference with your heel while you pedal.
Most panniers require you to subscribe to one design philosophy or another. For example, you can have a top-loading pannier that means that you have to dig around or partially unpack it to get to something on the bottom. Or you can have a side-loading pannier that avoids that problem yet can result in you spilling the contents while you try to pack. Dividers can make it easier to keep the innards of it organized until you want to store a combination of items that would fit without the dividers but not with the dividers. My trunk bag has some very handy little pockets sized to hold things like sports gels and tire levers and other such small tools.
External pockets or stowage are often handy, although they add seams that can leak and might not be as sturdy as the main pocket. You often see bags with mesh pockets or even a web of bungee cords to hold jackets. For trunk bags, since it's going to sit directly behind the saddle, it's fairly important that it has a place to clip a light or reflector. For panniers, it's more of a nice-to-have.
It's nice to be able to take your bag or bags off the bike and carry them around. Better bags have good shoulder straps for this occasion or can be converted into a backpack. There are also backpack straps that can be hooked up to a pannier bag.
One final point about panniers. You don't need to use them in pairs, although your bike may handle better if you do. Some people carry up to thirty pounds of weight in a single pannier. I've heavily overloaded my bike on one side before and it was totally rideable, but I did feel like it handled better if I balanced things more side-to-side. A heavy-weight trunk bag is going to make your bike less stable than a pannier bag of the same weight.
There's a wide variety of products out there oriented towards the outdoorsy type designed to fit inside a backpack or pannier. This is how you can make the Ortleib panniers, which ought to be really un-ergonomic, really ergonomic.
The simplest option is good old plastic bags, especially the zipper-topped "ziploc" bags. They are super-cheap and will be waterproof until you tear them.
I'm also fond of the Eagle Creek Cubes, which provide nice zippered packing for loose objects such that I can keep little things organized. So I have a half cube to hold things like my sketchbook and art pencils and sunglasses case and maps and money and other little things.
I've also got a ditty bag to hold my rain clothes. There's a wide variety of sacks shared between campers and backpackers and cyclists out there, ranging from mesh ditty bags to ditty bags that are somewhat water resistant to waterproof dry-bags.
Finally, I've got a plastic folder to hold what was formerly dog-eared loose papers.
The whole point is that if you want to get to something, say your rain clothes, you won't need to root through everything and untangle your rain jacket. And it also eases packing. You can put, for example, spare inner tubes and tire boots in a bag and then move it from your trunk bag to your panniers.