You can start with just a vest. I think a cycling vest is the most useful piece of clothing a cyclist can wear (maybe aside from good shorts). Pearl Izumi makes a good one called the Zephrr ($55; www.pearlizumi.com), complete with a windproof-fabric front and mesh back for ventilation. And it's super light so stuffs easily into a back pocket when you're not needing it. Alas, it doesn't have a back pocket itself, something I really need for easy access to my handkerchief. With that in mind, I actually prefer a vest I got from Canada's Mountain Equipment Co-oplight, like the Pearl one, but with two pockets. Alas, MEC has quit offering it. Castelli makes a nice vest with Gore Windstopper that has a front pocket; Sierra Trading Post has it for $54 on closeout (www.sierratradingpost.com).
For colder weather, a wind shell with long sleeves is the ticket. The Bellwether Hyper ($65; www.nashbar.com) is perfecta very breathable but windproof jacket that really takes the chill out of a ride.
Or, when it's pretty cold, you can simply go with a cycling "soft-shell" jacket. One new model: GoLite's Kinetic Jacket ($199; www.golite.com). Another good choice is REI's One Jacket ($189; www.rei.com). Both are all you need in cold weatherjust throw them on over a light wicking T-shirt and ride.
So there you go. Skip the Scotchgard and just layer up.