How can I carry more stuff?

Well, my backpack has run out of space, and I see these grayed out icons for bags...where do I get these bags? I am severely confused. Is everyone limited to their one backpack? And if so, what is a Rune of Holding for?

beltpouch for 5 more items

2 bags 5 items each

add a rune of holding to the bags not pouch for 5 more each bag

45 total not counting the public storage for 20 more

edit

merchant has them

bit further on for runes of holding

There is a collector for the belt-pouch in pre-searing (can't remember his location as it's been a while) . There is a collector for the bags in post-searing (he's way north in the Dragons Gullet area). Or you could wait a bit longer and find them all the buy. When I came through originally, bags became available for purchase in Yak's Bend, but I think since then they've made them available earlier.

In pre-searing, right outside Ascalon City, you can talk to a collector that will trade you a belt pouch for 5 Skale Fins (which you can get from the Skales right outside). In post-searing, you can trade 4-5 Charr Hides (which you can get from Missions) to a collector in Ascalon City for a belt pouch. After you do a few of the mission areas, you can buy bags and Runes of Holding. A bag has 5 spots and a Rune of Holding increases the size of a bag from 5 to 10 slots.

Plus, once you get to post-searing, you can pay 50g for permanent access to a Storage account that is shared between all of your characters. You will find Xunlai Storage Agents, who will let you access the account, in any town.

In post-searing Ascalon City you can buy bags from a merchant. Note that there are two merchants in Ascalon City, but only one of them has bags for sale. The other one has only belt pouch.

Rune of Holding is first available from a merchant in (post-searing) Fort Ranik, if I remember correctly.