Most likely:-
a) You'll need to adjust the joint parameters, particularly the fall off zones.
or:-
b) Increase the polygon density to allow for a smoother figure.
or both.

 Thanks Phil.

I was hoping not to have to mess with the joints settings. Sigh...
I went through your great video tut but I am sertain my brain is lacking a huge department since it is still Greek to me. 
Don't want to give up though so I guess I have to give it another go.

Another thought is that if you are bending the shoulder it will not affect the chest. Check the chest/collar grouping to ensure that the mesh that you want to move when the shoulder moves is actually within the collar group.

 Oh, ok that makes sence. I'll look at it later this evening, am off now a while.
Thanks!

The arm pit is an area where you'll probably need to make a joint controlled morph.  Over the shoulder is generally not so hard to fix purely with joint parameters, but I found I needed a JCM right there on a recent project.  Knee bend for tight fitting pants is another spot.

 Thank you guys for the suggestions.
I give up for now. I will post a thread asking if anyone have or can make the kind I need. 

Why give up?  If you've gotten this far you can finish it :)

pjz,
that is one very nice modeling and rigging job there.

Thanks - I'll be really annoyed if Ascaron declines to let me distribute it.

Quote -  Thank you guys for the suggestions.
I give up for now. I will post a thread asking if anyone have or can make the kind I need. 

Don't give up.

The Joint Parameters window is nothing to be scared of.  Seriously.  I went through all sorts of tutorials trying to learn how to use it.  But, none of them worked... UNTIL I actually sat down with it and started working with it simply by diving in and making all sorts of weird adjustments to see what their effects were.  I'm not good with it by a longshot but, at least I'm not afraid of it anymore. :)

One thing to remember when making clothing is that anywhere you have a joint in a figure that is going to have a wide range of movement, you need mesh that is going to allow that.  So, you need to be sure to have enough mesh in tight spots like armpits, crotches, knees, elbows, etc..  Make sure there is also enough mesh next to these regions to help give a smooth transition.  The final rigging and joint parameters will help smooth things out but that can't compensate for a lack of mesh.  Too much mesh is bad on computer resources but not enough is bad for everything.  So, make sure there is a nice balance between all categories of performance.

 Thank you everybody for the encouragement.

The problem at the moment is that I have a time schedule to follow and I am behind and really need to get things going. I sent for the DVD from poserworks which have the jacket I hope I can use. They had an increadible deal too.

I will get back to the jacket later on just for the learning so I know what to do next time.

pjz99, sorry, I forgot to comment on your very nice project. It looks great!