Unless you only intend to modify existing clothing by means of morphs, textures, and transmaps, you're probably going to need a 3D modeling program. These can range from expensive, professional applications like Max, Maya, and Lightwave, to mid-level apps like trueSpace, to simple freeware/shareware apps like MilkShape, Wings 3D, and Anim8or.

PhilC sells a highly-recommended tutorial CD that will walk you through every step of the clothes-making process (both conforming and dynamic clothing). He uses trueSpace in his examples.