Making items out of creature tissues isn't done yet. That goes under part (IV) in the Plan for this release. I have to tweak some material structures to get the full rabbit fur involved, rather than just one color of hair.
As items, the pants are part of your inventory and are an "extra-layer" from the viewpoint of damage and temperature etc. The game stores what order things are put on, so you can have a bracelet on over your sleeve, and then pull up the sleeve and put it back over the bracelet (once creatures start eyeing you as a target to rob, this might come in handy).
However, from the graphics viewpoint, pants currently replace the leg texture. All that garbage I've posted recently about item deformations and frills refers to this situation -- if you want the pants to appear as something other than skin tight, I guess there are three choices. You can use a regular deformation of the human leg model, with the pants texture (this is the same as the distortions that make some of the faces appear fatter than others). You could also add a "frill" (like hair) to make the pants spread out farther, and tell the frill to turn the obscured leg triangles off. Or, and I haven't thought this through yet, you could hook an item model (like a sword blade -- something that isn't based on the creature model) into the creature model -- this is somewhat like the frill method, but the model stands alone.
For instance, think of something like a fancy helmet or a giant shoulder-spike pauldron thingy. These wouldn't work with deformations, because the skin would stretch with them on the uncovered portions. Frills might not be ideal (although they could be made to work) because the item wouldn't be able to easily stand on the ground in its fixed shape -- this isn't a problem for pants because they would become distorted on the ground anyway (and probably just be displayed as a rectangle most of the time -- folded pants). Therefore, I'd want to use some kind of item model for helmets and pauldrons, but on the other hand, you'd want it to be morphable to fit the heads of various species, so you could have "helmets for humans" and "helmets for kobolds" that are quite different but shouldn't require me to make a million different models. This would take me back to frills on the creature model (because helmets seem much like the current hair, and pauldrons would be like giant pointy shoulder hair!), but I'd then have to figure out how to extract that to make a stand-alone item on the ground. This is why I didn't do hats first. He he he. Not 100% thought out, but I think all of the ideas needed are there.
Anyway, so yeah, there shouldn't be a slow-down or anything. Bodies won't be rendered when they are covered by items.