It depends. Some applicants dress very well, but bring nothing to the interview. Some are a little less polished, but bring a very directed affect which is in line with our culture. The clothes don't make the man/woman. You must have the fundamentals behind you.
Last year I interviewed an applicant who was dressed far more casually than the rest. The interview was direct, to the point, and went very well. Now as one of my residents, I see it was not a matter of being casual, but this person's personal style. When you are part of the interview process, no matter which side of the desk you sit on, it is the quality of both the questions and responses which count, not the quality of the wool and leather.