I think a lot of people go through this when they first start riding. Most people get over caring after a while. I used to wear big long T-shirts over my lycra shorts (mind you I was 14..... and teenage girls are usually pretty body conscious). The more I rode the more I got over it. As I started doing longer distances I started appreciating cycling specific gear more too - like the nice big pockets in the back of cycling jerseys (I've also shed a lot of stuff.... when I first started I had a rack and a trunk - now I don't carry more than what fits in a seat wedgie and my pockets)

Recently I've been riding to work - a distance I'd normally walk because its only about 2.5 miles, but bike to work month and now a continuing challenge from our transportation dept has got me riding it. Since its short I've been just wearing my work clothes and I wear skirts to work. The really funny thing I've noticed is that motorists seem to be much more willing to stay behind me.... I've got a funny feeling its men and they are hoping for a peep.... which is ironic because I usually wear opaque tights and I don't think that a glimpse of my tights and panties would show any more (perhaps even less) than my cycling shorts - which I wear openly....