First you need to create a cloth material and a deflector material.
You need the cloth material assigned to a set of CP's that are the cloth and
the deflector material assigned to the surfaces that will affect the cloth such as legs.
The cloth needs to be constrained to the model in some way or it will fall off just like pants that are too big.There are a lot of parameters to understand and a lot of trial and error to find the right combination.
A very short list is:
mesh density is very important for both the cloth and the deflector.
You need to have a minimum distance between your cloth and your deflector for the simulation to start without error.
In the chor you can set a parameter for collision distance. It must be less than the starting distance between your cloth and deflector.
These are just a few of the important things I have discovered.
The address below is to a tutorial in the A:M Films that helped me and explains it in pretty good detail.
It is about 45 minutes long.
Good Luck,
http://amfilms.hash.com/video/140/Cloth-Wizard