There are several different companies that make great yoga clothes that are very comfortable. Be Present is one that has a great line of yoga wear made of organic cotton. Inner Waves Organics also has a yoga clothes line that is also made from organic cotton. http://www.whiteapricot.com/fab_finds/rm_top_yoga_designers.php
tight stretch pants (flexible and breathable but also form-fitting)- victoria sect=ret sells good ones !(: check em out ; http://search.victoriassecret.com/exec/ <-- tpe in yoga pants and theyll all come up
I try to wear stretch pants (which you can get very cheap almost anywhere, but I do like American Apparel, since it is Made in LA) and a top that isn't too baggy (if its too baggy, it'll constantly float up when you're in downward dog or doing a headstand -- again, American Apparel cotton tanks work for me).