I am all for riding in normal clothes - I think the more people see other people riding in lycra and replica Sky shirts and so on, the less likely they are to get their bike out and use it as a form of transport rather than as a hobby - and we need people to see a bike as a valid form of transport if we are to get the air cleaner, the roads quieter and people fitter.
That said, I wear lycra long legs from Aldi in the winter because as has been pointed out up-thread, wet jeans take forever to dry and are revolting to ride in - and very heavy. I wear my normal tops, although I do also have a cycling jacket simply because I got too hot in my normal coat, but was too cold without it. The jacket was also from Aldi.
In summer I just ride in shorts and a t-shirt, and if it rains I get wet (I take spare clothes if I'm going somewhere where being wet would be unacceptable).
Similarly I don't have clip-in pedals simply because I don't want to have to faff about getting special shoes on to ride my bike, and when I get off it I want to look like a normal person rather than a jockey who has lost his horse.