What I wear for the rain depends on what I'm riding and how far I'm going.

If I'm staying in town, just riding a few miles to a restaurant and back, so long as it's not really raining hard, I'll skip dedicated rain gear and go for a 'comfortably damp' approach. Many layers of clothing that is either water resistant or warm when damp. Long underwear, wool sweaters and a wool cycling cap keep me comfortable enough for short rides. If it's really coming down, I might add a waterproof shell on top.

If it's going to be a longer ride in a sustained downpour, I'll go for a full rain suit. The Frogg Toggs suit is great. As mentioned, it's cheap, light weight and packable, and it breathes just as well as Gore-tex.