I don't prefer wearing armor because I believe that equipment (armor) is inherently a better option - it's just that so far, none of the costumes really capture the way I want to look, while the individual pieces of armor I can craft can get...closer...to the way I'd prefer to look.
I *was* kinda looking forward to the breton hero costume - then I previewed it...ugh...
i usually prefer armor because i can mix and match.
that being said i like costumes because it doesnt matter how horrible is my current armor if i have a nice costume to hide it XD
It has to be both for me. Some of the low level armour (Khajiit light or Redguard medium) I really like. Some of the more casual costumes I quite like to. But i'm happy wandering around in attire that others share with me. What would be really interesting is a greater range of normal clothing.