We don't get much rain here, but I did go through our "Monsoon" season (which actually saw more rain than normal this year) with no problems. I didn't have any rain gear - just my regular cycling shorts and jersey. In the summer it was kind of nice, though I imagine if it rained now I might not like it so much. I do have fenders now though. I haven't had an opportunity to test them yet...

One of my rides, the rain was so deep that my pedals were skimming the water at the bottom of the stroke. :-)