Only when you need to try St. Vincent DePaul's or Salvation Army. :D

The windbreaker I picked up at Goodwill many years ago has a few loose threads and one torn inside pocket now, but it's still the one I use the most. $7.

I saw a commuter yesterday morning who was wearing traditional white long johns top and bottom with a reflective vest over it all. I saw them from quite a distance back as they stood out being all white top to bottom.
Al

Thin wool military surplus watch cap ($6) for under the helmet would be my only addition to all of the other great advice. Since it was probably 75 degrees during my morning commute, none of my Seattle gear will be coming out of storage any time soon. But I still just ride with a t-shirt and cheap performance shorts covered by cargo shorts. I save money on clothes so I can spend more on the bikes.

Totally depends on your route, your weather, and your riding style. During the spring and summer, it gets blazing here so I'll usually commute in a jersey and shorts, especially since I never miss an opportunity to take a detour and turn my commute into a training ride. But during the fall, the weather is so cool and dry that I could ride for miles in a pair of chinos and a sweater.

So I think that only you can answer your own question. But I agree with the poster that said not to be cheap for the sake of being hardcore.

I go cheap whenever possible. Not because I'm hardcore, but because I'm a poor, working SOB supporting a wife and three kids.

The only requirements I have:

1) A good underlayer, (i.e. - thermals)
2) Warm socks.
3) Gloves. I just picked up some fleece flip-mitts at Wal-Mart for $4.00. They work great.
4) Windbreaker that fits over my layers. $6.00 at a thrift store.
5) Light rainsuit. $15.00 at a local hunting store and it fits over my warm stuff.

As someone who drives by lots of cyclists too, please remember visibility on the streets is important. You need to be visible as well as warm, dry and comfortable. If that means a more expensive reflective high-vis shirt or jacket then so be it. You probably don't need to spend big bucks though if you're comfortable with the looks of sub-$10 high-vis vest over whatever you've got on.

I use $8 hi-vis wicking T-shirts and $20 on sale bike supermart shorts. Non-cycling specific tights over shorts when cold. I put on long sleves under high vis t-shirt when its cold.
Shorts and tights are black (with reflective bands I put on later), but I dont wanna wear yellow tights.

Al

Here's a good cheapie alternative to cycle-specific: Well-Lamont ragwool gloves with tacky rubber dots. $1.99 a pair at Safeway. Exactly the same as what you'd find at the LBS, except that the rubber dots aren't in the shape of a C for Cannondale.

Goodwill! Man...why didn't I think of that?!?! (for wool stuff)

Go with what works... I bike commuted for some 20 years with T shirts. I do use shorts, but they are sooo comfortable that when I first tried them back in the late 70's I realized there was no going back... and they were wool back then.

I only bought my first jersey this year... but I still have a drawer full of cotton Ts.