The little details in clothes and finnishing

Ive gotten the hang of wrinkles, matching seams and all that joy but Im having trouble making my product look "finished'. Im not sure if I should blur the lines where my edges are (like where my neckline meets the alpha) and detailing a collar line, does anyone have tips on those (gimp preferred)? Ive also seen clothes with a bit of shading behind it to make it stand out not sure about that either ^^;

There are many approaches to making the cut-out portions of clothes look less ... well ... cut out. Blurring can help, as can a bit of progressive shading to make it look as if the fabric is rolling toward a neckline instead of looking flat. You could also try adding a subtle drop shadow beyond the fabric, where it falls on the avatar body. It shouldn't be very heavy -- just enough to suggest a slight gap bit of relief between the clothing and the av's skin. The best way I've found to do it is to paint on the alpha channel image itself with white paint and a soft brush. Set the flow rate to no more than 3% and soften the edge of the neckline gently where you want a shadow to appear.

Making sewing seams helps too. Don't forget darts, the subtle pull of hemlines, the shadows behind pleats and gathering.

Study the construction of real clothing - that will help a great deal.

Also realized I havent been using the pen tool, Ive been doing the alpha outlines but hand so yeah..DUH to me XD, also to anyone else reading this use the pen tool it makes things a heck of alot easier !!

Also, you're probably already doing this, but... Make your master image much larger than the final product. Clothing and Skin textures are ALWAYS 512 x 512. But for good, realistic detail, I would work no smaller than 2048 x 2048 for the Photoshop master file, and then reduce a copy of it before importing as 512 x 512.