Some of the really good artists here will actually put clothing on the figures in postwork... check the tutorials section... a few of them posted how they do it there...
It's also very commonly done to "clean up" images (get rid of unwanted folds at joints and so forth)...
Photoshop and Paint Shop Pro are probably the most common programs for it, but really, most any graphics editor can be used... if you want a good free one, try Gimp...