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I just attended a job fair on the other side, as a recruiter. I'll give you my feedback.
First, Formal Business attire - wear a suit. You do not need to wear a formal interview suit (unless it is the only one you have). The idea is to have the clothes make a good impression but not steal the show. I had someone walk in with a bright cherry red suit and it was incredibly distracting. Conversely, I had someone walk in wearing a casual outfit and toting a large backpack-on-wheels thing behind her (and she was smacking chewing gum) - I chucked her resume right in the "no" bin; she clearly is not someone I can put in front of a client. You can get away with a dressy pant-set, but no cardigan-set type stuff, that's a bit too casual. Unfortuantely, we're talking dry-clean-only here.
Second, comfort. Wear the most comfortable shoes you can possibly get away with. You will be standing the entire time; you should be as comfortable as possible without compromising looking sharp. Flats are a must - which is why I recommend pants.
Unrelated to the what to wear question - memorize a 30-second summary of your qualifications and what you are looking for. At job fairs recruiters have 30 seconds tops to scan your resume; if you help them catagorize what postion they should be looking at you for and why you are qualified for it, you are more likely to get an interview rather than merely placed in a large stack of resumes to be scanned.
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