I've always been a huge fan of consignment stores. I grew up shopping in them and they make so much sense for kids clothes, both from a budget and a green living perspective. I general, I don't think there is anything greener than reusing things that already exist!
The particular consignment store I usually go to is called Once Upon a Child It is located in Hazardville CT (Just south of Enfield). It is my understanding that they have other locations, but this is the only one I have been to. It is a little bit hard to find, and is located in a huge strip mall complex off of route 190. They have no shortage of cloths, toys, equipment and even some new stuff for sale.
Unfortunately, because of the sheer volume of stuff they accept, it is sometimes necessary to hunt through racks of clothing before you find the decent pieces among the junk. Still, if you persevere you can find Baby Gap, Old Navy, Oshkosh and lots of other name brand clothes for very cheap. I can usually buy an entire season's wardrobe for my son for about $60 (The price of maybe two shirts at Baby gap!). My only real complaint about the place is that it is a bit of a factory... and you can forget about putting things on consignment there... they seem to only accept consignment clothes on the weekends (even though their website claims they accept items everyday, I was told at the store that I had to bring it back on the weekend), and the couple of times I tried to bring stuff in, I was told there was a 45 minute wait until they could get to my basket (impossible when you have a 2 year old with you!).
A-: for selection and price
C+: for location and ease of the consignment process