For a few years now I have stopped bothering with the bag thing. I always carry contacts lens solution, toothpaste, hand lotion etc somewhere in my hand luggage (flight-sized, though - less than 100ml each) yet have not once had any problem with this. Not even a question.

OTOH, I remember a documentary I saw on NatGeo a couple of years back. A chemist showed how easy it was to mix two 100ml bottles of (colourless, odourless) chemicals together to create a bomb capable of blowing a hole in an aircraft fuselage (they demonstrated on an old aircraft hull). Makes you wonder just a little bit about the futility of the liquids ban...