Update: today had very similar conditions to when I made my original post: 12C/54F and light rain. Instead of a rain jacket, I wore a synthetic (poly/nylon/spandex blend) long sleeve jersey meant for cooler weather, and that was much better. Yes, I got wet, but I wasn't cold. More importantly, I didn't overheat in a non-breathable rain jacket.

Thanks for the responses and suggestions everyone - even the rain jacket suggestions :). I'm going to try to track down some wool wear before fall, since that more than anything sounds like what I need.

When people ask me about rain, I say, "I'm gonna be soaked either way" ...given the option of sweat or rain, I'll take rain. With that said, if it's cold I'll wear atleast water resistant stuff. Mainly because warm stuff tends to become heavy stuff when it gets wet. Sounds like you found that option today.

Depends on temps. If above 15c/60f or so, just the lightweight vest as another poster mentioned. If a cold rain, then my bike-specific shell.

If it is chilly I'll don a shell up top, possibly pants on the legs if it is really chilly. Otherwise, I truly enjoy riding in the rain, and just let it soak me.
The fenders keep the gnarly stuff off, and the rain feels lovely on my skin.

There's been the odd occasion when wearing the rain coat has caused me to sweat too much, but normally, if it's raining more than a drizzle, it's a net positive. This morning, the coat was soaked by the time I got to work, while underneath I was just slightly damp from perspiration. Mostly I find that rain in Edmonton is very cold, so even in situations where I'm not dryer, I'm still more comfortable. When I've traveled to warmer climes, this has been less significant.

The worst thing, I find, is that the parking garage where I lock up is very humid, and warmer than it needs to be. So even if I ride in dry, my face starts to drip as soon as I ride in.

I carry my rain gear in my pannier. Sometimes I use it and sometimes I don't. But its there if I need it.

Wool is great. As a maniacal knitter, I love the smell of wet wool (although much wool has no noticeable smell, as Forrest said). If you start to associate the smell with awesome bike rides, you might grow to like it.

Since wool can be expensive, make sure that you either buy wool that says "MOTHPROOF" or you store the wool, clean, in an airtight bag or tub any time you plan not to wear it for awhile. It can take more maintenance than synthetics when you do wash it, so try to get superwash or machine-washable wool and follow the laundering directions closely. I hang my wool sweaters to dry, clipping the bottom hem of each to a hanger so the shoulders don't deform.

While riding in the rain, I only put on a jacket if I need it to keep warm. I'm getting wet either way. (Full disclosure: I have not commuted for awhile, so riding in the rain isn't a workplace issue right now.) I have a Showers Pass jacket that I keep strapped on top of my rack trunk in all weather. There is a length of plastic in the hem of the jacket sleeve that holds the sleeve open so air can go through. If it's cold, you can close the scoop with a velcro strap. You might be able to arrange something like that in your jacket if it needs it. Mine doesn't work that well for me, though, because my arms are too short :)

temperature should be priority.

I live in the tropics, and as tjspiel points out, theres no need for rain gear. You do need a little plastica bag with a pair of clean socks and underwear. This is my way, cause water is not bad, street slush and crap is NASTY!

...sounds like you might need fenders?

Zipped side vents are your friend. I can tell you that the REI Taku is well worth your money if you can swing the cash. Bought one on sale five years ago that I've used as a biking jacket, a skiing shell, and my go-to foul weather gear. The zipper just died last month, but I'm still kind of reluctant to replace Ol' Faithful.

My previous rain jacket had pit zips, but I still managed to swelter when the temps were much higher than 6C. :(

Hey, Wild Animals - is this a good price? A friend of mine offered to make me a pair of gloves and a neck gaiter if I buy the raw materials, and teach her to use a database program. I've got a few 17.5 micron base layers, that are as soft as anything else I own, so I've been keeping my eye out for 17.5 micron wool...

hahaha yeah! lol

i should quit using my road bike for rainy days......i do have a moulton that has fenders and racks for stuff....

I just started using good rain gear this year since I've been doing lots of LD riding in whatever the weather, year round.
Previously I just donned a wool baselayer and a winter jersey, got wet, and stayed warm. Then I started talking to the rest of my LD club and realized it's not just about staying warm... there's a comfort factor in there, and sopping wet wool (warm or not) is not comfortable to ride around in for a long time.

Now I have a Showers Pass Touring jacket, which is a bit on the heavy side but can take the abuse of being stuffed in a pack carelessly or balled up with spare clothes and used as a pillow for a roadside nap on a really long ride.
I can wear lighter weight gear underneath, and the zip vents, loose cuffs and cape vent in back make it fairly drafty so I don't overheat when it's 12 - 13C (55-ish F)
I hate having cold, soaking wet feet, so I use Gore Bike Wear non-insulated booties, and I'm considering going all out this winter with a waterproof helmet cover and some Showers Pass rain pants.

If it's warm out (closer to 60-ish F) then I don't bother with rain gear. Warm rain doesn't bother me.

Or you could just buy the clipon fenders. I have the SKS Raceblade ones. I've heard good things about the Planet Bike ones as well. Keeps road grit from getting above the feet pretty well. :-)

Rain cape for me. I just keep it in my bag and pull it out when it rains. I never get too hot with it.

November through May ... absolutely!

Hey, Forrest, I wrote a nice long reply with links and everything, but my computer hung up and I lost it.

Basically a gaiter in that weight of wool is gonna require about 200 yards (possibly up to 300, depending on size), and a pair of gloves will require 200-300 yards depending on style and size. Let's say each will require 250 yards. For a nice superwash merino (not 17.5-micron merino) you can expect to spend $9.50 for 175 yards, which puts you at $28.50 for the whole project, plus one extra skein for safety if you can swing it. For your Darwin yarn, it would be like $34, plus extra for safety.

You can find yarns that probably feel exactly the same as those nice yarns for less, especially if you look at sock yarns, which are usually finer and knit with more stitches per inch. That means more work for your friend, and a lighter fabric, but tighter gauge and smoother feel. Before you spend big money, drop by a yarn store and rub some skeins on your neck :) Also if you go to a yarn shop, you can return unused skeins for credit or sometimes cash.

Ibex and SmartWool and those guys use REALLY fine yarn, so the fabric is going to be different, but I'm not sure what the end result will be--the yarn is heavier (warmer), but the fabric is more holey (more wind can potentially get through). Your friend could use textured stitches or ribbing to keep more wind out (this requires more yarn for same size), or you could add a fleece panel to the front.

Hope I didn't forget anything and this is helpful! Oh and if you're looking for a pattern, knitters usually call gaiters "cowls," so that might turn up more results. They'll also have more-specific yarn requirements so you won't buy yarn you don't need. Make sure we get to see them when they're done! :)