That won't work if the player is animated, though, which I assume is your problem. Here are my thoughts:
Try to break the clothing and items down into "static" items that don't necessarily need to deform with the player, like backpacks and swords, and "dynamic" items that do, like shirts, pants, and boots.
Static objects can be easily achieved through ShaunRW's method of just constantly positioning the object at the right position relative to the player, or even more easily through the command GLUE OBJECT TO LIMB.
Dynamic objects will be more tricky. You have three options that I can see:
1.) Use the new Cloth commands to create clothing, and attached this clothing to the player. Upsides: This will create awesomely realistic animations as the cloth sways, wrinkles, and deforms around the player just like real clothing would. Downsides: It will require a LOT of tinkering and possible vertex manipulation, because as of yet the MAKE CLOTH FROM OBJECT remains an idea.
2.) Rather than add on new objects to the player for shirts and pants, simply retexture the affected areas. Upsides: Comparitively, very easy to accomplish. Downsides: Doesn't allow for new geometry to be added such as baggy sleeves, belts, and pockets.
3.) Create seperate objects for the pants and shirts, and use the limb positions of the player along with vertex manipulation and
mesh deformation to bend the objects so they look like they are on the player. Upsides: Looks better than method 2 while being much more possible than method 1. Downsides: It will most likely still take much fiddling to get the mesh deformation to wrk how you want it to.
There's my two cents
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