I'm not incredibly strict about what the older ones wear - our youngest is 4 & obviously has no real choice in what I buy.
My philosphy has always been that as long as the clothing is clean and appropriate for the occasion, then it's not a problem for them to wear it.
But, my kids also know that there is a clothing budget - so if they want the latest style, it's up to them to make up the difference. Our DD never thought that labels were important enough to pay the difference (that & she could always borrow from my closet), but our older son decided that he had to have a certain sneaker this year & gladly forked over a full month's pay from his paper route to pay the difference.
