The straps are supposed to go under the seat pad - they don't cause me any trouble with my 2006 S3 but there might not be so much clearance on the '03. They're only single straps, though, so it shouldn't be a problem in most cases.
The straps are pretty long and easily go right round my tail unit - although I appreciate that there's a lot more on an '03 to get round. The way the pack attaches, as a last resort you could make your own straps and just slide the Kriega buckles onto them.
Both the US-10 and US-20 also have straps sewn onto them at the bottom so it would probably also be possible to mount the packs using these (rather than passing the main straps over the top). It'd be a bit less stable, though. The US-20 in particular has several mounting points so I'd be surprised if you couldn't find some way to hook it up.
The way the whole thing goes together, it also looks like you could attach three US-10s to a US-20 (to make a 50-litre pack) if you got creative with the straps.
If in doubt, just give Kriega a call - they're very helpful!