Not sure if this would be better for the crafting forum or this one, but it doesn't really specifically deal with *crafting* the clothing.
Anyways, the idea is that:
1. More "non-armor" style attire is added to the game.
2. Second set of equip slots mainly for this "normal" attire, though I guess the designers could make it so regular gear can go in them.
3. Options for when the "cosmetic" outfit is shown. Always, Never, Town. Always/Never is pretty self explanatory, (and probably so is town) but yeah, Town. You'd automatically switch into your cosmetic appearance when you enter Town, automatically switch back to your armored appearance when you leave.
4. The second set of slots would have no effect on your combat efficacy. Even when switched you would still effectively be wearing the primary set of equipment.
When this feature goes in every character would be given a default equipped set of clothing look based on race, (maybe some random color choices, or possibly based on class), with the option set to Town.
Achievements Suck