No undies, and very happy about it! So comfy!
(and in lycra my butt looks much better *without* the undie lines!)
If you just don't want to go out in one layer of fabric, try wearing your shorts as though they were underwear (like boxer-briefs) and put capris or baggy shorts on over them.
One of my favorite things to wear on my bike is my Terry Commuter Skort. It's bike shorts with a wrap skirt over them. Nobody gets to see anything I don't feel like showing, and I'm very comfy on the bike. (no undies)
Edit: in fact, that's it in my avatar picture! http://www.terrybicycles.com/product...arel&sc=Skorts
"If Americans want to live the American Dream, they should go to Denmark." - Richard Wilkinson