I think I read somewhere that layering clothing wouldn't be an easy thing to program, but it already happens with some accessories...
Alpha layers. The best I can think of is Saints Row 2, which allowed the player to add different clothes in certain layers.
If you had four layers, you could add trousers in layer 1 and long boots in layer 2 and the trousers would be tucked into your boots. The other way around would have trousers over boots. The same for every other piece of clothing. You could wear underwear outside your trousers, a tee shirt on top of your jumper... the sky would be the limit. Once you had finished designing your layers you could compress them all together to a single skin to save on render time in game.
Having socks and shirt on layer 1 and trousers on layer 2 would mean the socks and shirt would be tucked into your trousers (being on the lowest layer). Add a jumper on layer 3 and it would be outside your trousers (being on a higher layer). Add a tee shirt on layer 4 and it would be outside your jumper... etc...
As for adding it into game? Anything is possible for a talented programmer...
