There's many ways to do custom clothing. If you're interested in recoloring, the steps are pretty easy to do with just Body Shop.
1. Open Body Shop and after the program is loaded, select Create Parts.
2. Choose 'Start New Project'.
3. For clothing, go to 'Create Clothing'.
4. Then from there, you can choose a shirt, a pair of pants from whichever category you pick like Everyday.
Example: I want to recolor a female adult shirt from Everyday. So I check the appropriate age and gender before I select Everyday and search through the tops until I find a suitable shirt I want.
5. Then click 'Export Selected Textures'.
6. At this point, you are prompted to name your project.
Example: My project would be named something like "FemaleAdultShirt".
7. Click 'Accept Project Name'.
8. You can add a tooltip and/or a new category to your clothing piece if you want to.
NOTE where your new project is saved to.
The new projects are generally saved in the following location if you have XP. Vista shouldn't be different:
C:/Documents and Settings/Your User Name/My Documents/EA Games/The Sims 2/Projects/Your New Project
9. Exit the game without importing until you know for sure you want to keep Body Shop open and work on a recolor, going back and forth pasting the newly updated file into your project subfolder and hitting Refresh to check your work out in real time until you're satisfied with your new work. Then click 'Import to Game' to import your new clothing into the game.
Recoloring doesn't require any expensive program to download or buy just to do recoloring. Paint.NET, Photoshop or some other program is good to use.
If you're only going for meshing, this is a much more difficult arena to go into because you should read up on the tutorials from various places and have the right tools to use. I understood Milkshape is a very popular program used by both Sims 2 and Sims 3 creators to make their own new meshes.
Tutorials:
You can get started by browsing the tutorials here and there:
Insimenator TutorialsMTS Tutorials - Database And Knowledge CenterThe above two links go to a broader range of tutorials from simple recolors to meshes to building and covers a variety of tools too.