To make PMD, I use "Morphing Clothes" program by Dimension3D, available at Rendo

http://www.renderosity.com/mod/bcs/index.php?ViewProduct=64629

One other advantage of PMD is that you can add morph while clothing is conformed.
You can use other morph transfer utilities if you don't need to add morphs on the fly.
When clothing is saved, morphs will be in standard format unless you have external binary enabled.