New bike

Just took advantage of a great bargain from LBS. Bought a new '08 Norco KWEST with great component package. I'm going to use this bike as my primary cycle for commuting,training and long rides (not necesarilly touring though). I plan on riding virtually year-round and live in western Oregon. I'm trying to get some advice on panniers that won't be too large, but that I can still carry enough stuff to run errands, carry extra gear and small purchases with. I like the 'new' Arkel Dolphin 32's. They're smaller than the 48's and I like the construction of them both and they're waterproof. The brand appears to be very popular with the cycling community. Does anyone have any thoughts about these panniers or any others? Also, would like some ideas on good (not too expensive) headlight and tailight. Won't necessarily be riding at night, but would like to stay visible if that happens as well as be able to decently see what's in front of me. I'm not a seasoned rider (getting there though) and had a much less capable ride prior to this. I'm learning as much as I can about this activity and appreciate your help.