I have a friend in the area who swears by Tree House Children's Store in Redmond (15742 Redmond Way, to be exact) for all her little ones' clothes. She has a preschool daughter and an infant son, and gets many of their clothes there. She says that she can get name-brand, barely-worn clothes for a dollar or two, and very often finds designer clothes with their price tags still attached. Ah, the joys of consignment store shopping in the land of Microsoft! And, quite honestly, with consignment deals like that, she'd be crazy to pay retail for kids' clothes, especially considering how fast they grow out of them in the toddler/infant stage.
I've been intending to try out Plato's Closet in Bellevue, which is a consignment store for teens, but my boys need so little in the way of clothes, that we did very little back-to-school shopping.
In general, if you have access to a good one, I think consignment stores are the way to go for kids' clothing. It's better to reuse something that is still in great shape than to pay overinflated prices for new. Ditto for hand-me-downs. If you can hook up with friends who have kids of differing ages, this is a great way to get some wardrobe items. My oldest son has a friend who has passed down some of his things to my youngest son. Because they came from outside the family, my youngest son doesn't even look at them as hand-me-downs (he sometimes balks at having to wear some of his older brothers' castoffs).
I'd love to hear from any of you who shop consignment stores: what store is it, where is it, what kind of deals do you find, when is the best time to shop them (i.e., mornings, weekends, Mondays, etc.).