Got frustrated with our clothes budget (and DS1's ability to destroy pants in under 6 weeks) so started thrift store shopping over the last few months for DS1 and wow, what a difference. Goodwill and St. Vincent are quite nice around here.
Tricks include: demand high quality (don't settle for crap b/c it's cheap), shop up a few sizes in order to avoid desperation shopping when your kid spurt-grows, have Tide and a toothbrush readily available to remove simple stains from great pieces.
Some trips yield 5-7 items, others times I have walked out with nothing. But the budget difference is worth the effort.