I use and like the Banjo Brothers waterproof panniers. I wish they were a little bigger, but I can fit A LOT of groceries in them, so I think they are great for grocery-getting. I will always want panniers to be bigger.
I know people who use the Axiom panniers and are very happy with them. Axiom has a big line of panniers, and some are waterproof and get pretty big. Next time I buy panniers, I will probably get these.
Note on rack/bag compatibility: Many racks you'll find at bike shops are the "newer," thicker tubing style, which fit the metal hooks on many popular panniers. The Banjo Brother's panniers have smaller hooks (well, mine which I bought a few years ago do) which don't fit on thicker-tubed racks. It's easy to find a smaller-tubed rack - Kraynick's has inexpensive ones. I've been using a cheap-o Kraynick's rack with my Banjo Brothers panniers which feels really sturdy and hasn't buckled under all my crap yet.
What I would do is find panniers that you like, and then buy a rack which fits the panniers. Just take them to some bike shops and see how they fit on different racks.