markz said:
Flat steel would be perfect.
Really? My armchair engineering would have me thinking that tubing is stronger for a given weight than flat bar and that round tubing would generally be better than the square tubing and should provide more of the lateral rigidity that Chalo mentioned. There's a reason you don't see often see bikes made from flat bar.
That said, I might be inclined to make the top/flat portion of a rack out of square tubing for ease of creating attachment points and or use flat bars for pieces that might fit better with thinner members - like where the rack connects to the seat stays. Speaking of which, I'd consider triangulating the seat stay attachments to increase lateral rigidity some.