Well, I agree with the non-advertising-clothing issue in general. I don't like to pay to display logos on my person. I think that character clothing is a way for large companies to brand themselves early with children. (Also, my personal taste runs to simple clothing!) It's just one method of many, though, and I think that even if you don't do character clothing, your child may still get into it through toys, tv, movies, books that are distributed with characters on them.
Our general family position is to try to avoid character-related stuff. I think the only character toys our 3-year-old son has are a few little Richard Scarry cars/people that I found secondhand. He loves the Busytown books in a big way so that was a concession on my part. But generally, he doesn't watch any TV or videos (unless he is really not feeling well), which cuts out most of the exposure to characters. No commercials, no Disney TV shows, no endless previews on videos, etc.
I'd prefer for him to create his own characters, or fall in love with ones from books that don't show up in mass merchandising campaigns. Those options tend to make his imagination work more than the typical Disney characters do. Right now one of his 'character' favorites is Ms. Frizzle from the Magic School Bus, because he loves the MSB books. He has seen one MSB video and thought it was cool, but I know his love for the Friz comes from the fact that she is such a creative, inspiring person...not from some huge commercial MSB ad campaign.
My point is...I agree, but I don't think you should beat yourself up over the occasional character item. If that was all that your kid knew about and played with, that'd be one thing...but as an occasional thing I don't think it's a big deal.
Tara