Like the other Seattle area posters, you just keep on going. There's lots of cold rainy days/nights and that doesn't stop me unless there's so much rain that the roads become hazardous (i.e. huge lake-like puddles that obscure the roadway) or it turns to ice. Once commute last fall I encountered cold rain, hail, snow and sunshine in 8 miles, it was in the 30s.

Layer, layer, layer. I don't use waterproof anything except for booties. My gloves claim to be waterproof, but that only lasted for 2 commutes. Now they are just nice and warm and dry quickly, with good reflectivity. I can put those thin rubber gloves, surgical, on under them if I need to. As said before, wool and thin heat-holding pieces like tights and arm-warmers are fantastic as is something to cover your scalp under the helmet (personally the feel of rain landing on my scalp through my helmet creeps me out). I also have a good water-resistant jacket (Canari) and RainLegs (how did I survive without these wonderful things!). Reflectivity is a part of every piece of gear too.

For bike - good lights front and back. Fenders, front and back. Waterproof panniers. Extra reflecties all over bike. For drying stuff I am luck to have a large locker room and nice people using it. We all have no problem hanging pieces of clothing all over the place to dry during the day.