This is a really good topic...
Since I'm still in school, and good suits are so expensive. I dress pretty casual yet conservatively at work.
I hate to see everyone wearing such drab colors like black, blue and brown. I love wearing floral dresses and skirts that offer a more feminine touch to my office. (I work with attorneys and they are sooooo conservative)
I think regardless of my dress, the work that I do and the efficiency by which i complete it means more to them. Of course, I'd never come in in hoochie wear. but since I don't draw too much attention to myself (i.e. gossip, personal phone calls, leaving the office for extended periods), my clothes are not an issue.
My bottom line is: Your work ethic should be adequately complemented by your clothes. Professional dress does not come at the risk of looking nice in something less business formal. Just don't wear club clothes to work the next day.