Yes, definitely buy the salwar kameez. You can get them made extremely cheaply and you'll find they're cooler than anything you will have. The scarf is handy if you visit temples (covering your hair).
I received lots of compliments from people (espeically middle aged women) saying I looked like "an Indian lady"! I think you get a bit more respect as you don't look like the average scruffy backpacker.
Hi, Travelling around North India next Easter and intend to visit temples as well as tourist spots. Any ideas on clothing beyond t-shirts rather than vest tops, long skirts and a pashmina. I am assuming toilets are basic so am guessing sandals over flip flops, but I may take my she-wee. Any tips gratefully received (and I will be taking a lot of anti-bacterial wipes and hand sanitiser)