From Virginia Woolf’s Orlando, a (brilliant and witty) story about a man who turns into a woman, this bit is set around 1750:
Vain trifles as they seem, clothes have, they say, more important offices than merely to keep us warm. They change our view of the world and the world’s view of us. For example, when Captain Bartolus saw Orlando’s skirt, he had an awning stretched for her immediately, pressed her to take another slice of beef, and invited her to go ashore with him in the long–boat. These compliments would certainly not have been paid her had her skirts, instead of flowing, been cut tight to her legs in the fashion of breeches. And when we are paid compliments, it behoves us to make some return. Orlando curtseyed; she complied; she flattered the good man’s humours as she would not have done had his neat breeches been a woman’s skirts, and his braided coat a woman’s satin bodice. Thus, there is much to support the view that it is clothes that wear us and not we them; we may make them take the mould of arm or breast, but they mould our hearts, our brains, our tongues to their liking. So, having now worn skirts for a considerable time, a certain change was visible in Orlando, which is to be found, even in her face. If we compare the picture of Orlando as a man with that of Orlando as a woman we shall see that though both are undoubtedly one and the same person, there are certain changes. The man has his hand free to seize his sword, the woman must use hers to keep the satins from slipping from her shoulders. The man looks the world full in the face, as if it were made for his uses and fashioned to his liking. The woman takes a sidelong glance at it, full of subtlety, even of suspicion. Had they both worn the same clothes, it is possible that their outlook might have been the same.
In our image-centred society, clothes are a big deal. A good percentage of the high street seems to be clothes shops, or at least shops whose core product is clothing. Why do we spend so much money on clothing? What makes us buy the particular style of clothes we choose to wear?
I’ve always gone for the fairly straight edge bland clothing look, mainly because I don’t have the guts (or funds) to walk around in a pinstripe suit with slacks, a bowler hat and a cane, which is my ultimate aim, but also just out of laziness and my dislike of shopping-centre shopping. I do think clothing choice says a lot about the wearer, but I’m far more concerned about the post-image stages of human interaction than immediate appearances, so I try not over-emphasise clothing and presentation. I think one of my future ‘projects’ will be to experiment with some different clothing ideas to see how they affect social intercourse.
Although it is a sweeping generalization, I find that within social groups (most obviously when we are young) people want to dress like others, they want to be “in fashion” (in the loosest sense of the phrase), but at the same time nobody wants to be caught wearing exactly the same clothes as somebody else (with a few exceptions). Clothing is a fairly unique product in this sense, that a person wants to look the same and fit in with everyone else, but also wants to be individual and stand out at the same time. Clothes differ from other products, such as an iPod, because everyone has (more or less) exactly the same iPod, and that’s what counts - pure single product ownership. This is why we end up with lots of clothes shops, selling pretty much the same thing, with slight but important differences.
Clothing choice enables us to have a sense of belonging, but also a sense of individuality and uniqueness at the same time; security and freedom; acquiescence, apathy and (in some cases) a platform for communication. All of which are rather fundamental aspects of our lives - aspects which can be expressed and cultivated through our purchases.
[Picture from qube. Check out Rachael King's post on the same subject.]

“And why do you worry about clothes? See how the lilies of the field grow. They do not labor or spin. Yet I tell you that not even Solomon in all his splendor was dressed like one of these. If that is how God clothes the grass of the field, which is here today and tomorrow is thrown into the fire, will he not much more clothe you, O you of little faith?” (Matthew 6:28-30)
That’s what I also think about clothes.
As you know, I am a big fan of that Virginia Woolf passage, but you have left something out here - gender. Clothes are a crucial part of gender identity; this performance that one has to maintain to fit in with the norms of society - I think that’s what she’s getting at.
Unfortunately, appearance dictates a large part of our social interactions and our reception in society - amazing how the visual can have such a hold on our social experience and can control the outward projection of the self. Clothes can enhance one’s individuality, but the element of deception and masking is always present - first impressions generally do not extend beyond that façade.