Using plastic bags is probably going to be bang for the buck. Regular ziplock bags will be great for smaller items, but Ziplock also makes larger heavy duty sizes at 3, 5, and 10 gallons if I remember correctly. Those things rock! You can't beat them when you compare cost and weight with other bags. I've been using the same ones for probably 6-7 years now (I should probably replace them). I think it's the 10 gallon size that I use for deployments to completely line my sea bag, I will also throw several of the 3 gallon bags in my main pack and day pack for clothing, boots, etc. In the last few years the Marine Corps started issuing really nice SeaLine dry bags, but I still use the ziplocks. Like JGNolen said, they probably won't hold up to full submersion for too long, but they can totally handle a brief swim and certainly a heavy rain storm.
I've also been mulling over waterproofing my bag, but there are a few things throwing me for a loop. First and foremost is the fact that I live in a desert and the DWR treatment would wear off by the time it rains again. Aside from the lack of rainfall, the desert thing presents another problem, most DWR treatments are pretty worthless when they're dirty, and the dust here will clog the coating up in a day or two. I was kind of hoping I could find a treatment that would help repel water and dust, but I may have better luck finding the fountain of youth.