Firstly - since I do so happen to be of the female persuasion, mostly everything here relates to female clothing. But, some of my opinions and comments can be for guys too. Also, I write this for people who are new to this, as someone who IS new.
From what I have seen, Ren Faire costumes can go from the very easy Halloween costume in a bag type to elaborate, expensive ensembles. This also means costumes can go from being historically inaccurate to spot on. Of course, that does NOT mean your costume HAS to be completely accurate, elastic on a waistband or on the neckline of your chemise will not ruin the effect of your costume, in fact (and in my opinion) it can help the costume fit better, and make your life easier. Being 100% accurate is NOT a requirement. I tend to find that most costumes are very personalized from the overall theme, the fabrics and accessories. I feel that it's really all about what is comfortable for you and what makes YOU look good. If you want to wear a floaty Guenevere style dress, go for it. If you want to wear your full out Crusader kit, by all means, do it! Does it represent the English Renaissance to a "T"? No, but it works with the overall theme of the event.
Now, all that being said, there are a few things I would NOT recommend. Personally, I would not be caught dead in a bagged Halloween costume, for a few reasons (wow, I am a HUGE snob). One, they are extremely cheap, and poorly made. Their purpose is for one night for a few hours, not for a whole season or many seasons to come. Second, that cheap quality comes with poor fit, no one wants to be adjusting their bodice to no avail because the stupid thing is attached to her "chemise". Or no fencer lad wants to be picking up his trousers all day because they keep slipping. Third, the fabrics of those costumes are awful. They are most of the time made of 100% synthetic materials that tend of fray, unravel and rip. Plus, they are UNGODLY hot and do nothing to absorb moisture and sweat, because, this IS an outdoor event, in the sun you WILL get hot and sweaty.
On the converse side - super elaborate costumes are beautiful, make anyone look amazing and are for the most part quite accurate in a historical sense. I am specifically talking to the ladies on this one, here. Men's noble or courtly class outfits can be much more forgiving and easier to wear. For the ladies however, our world tends to be more difficult. For someone who is starting out - I personally would not recommend a huge elaborate affair. Why? One, cost. It can get very very expensive putting together a proper court costume, from the ground up. For a first timer out, who may or may not be sure if they will attend a function like this again, it may not be a good investment. Second, on the same train of thought - there is a LOT that goes into a court costume. You will need the proper foundation garments, like a supportive corset, bloomers, stockings, and a chemise. And of course a farthingale or a hoop skirt. I personally feel that the logistics of getting into and out of just the underwear seems tough. Walking around in all that if you're not used to it, seems really tough too. Especially with a hoop skirt - you suddenly become a lot wider and thus fitting into certain places becomes extremely difficult. You will be historically accurate, but honestly? I like being able to maneuver around into shops, dance, sit at the bar and sit in the grass when I watch the tournaments. Of course, all the above opinion is really for naught if you ARE experienced in wearing these garments or similar (and if you are, please tell me how you get into and out of those tiny little shops!).
Another suggestion: stay away from going out of period - Rocco dresses with their panniers are great, but not for this event. Also, while your Storm Trooper armor is by all rights awesome, leave it at home. This is a Renaissance Faire, not Comic Con. Same also goes for the anime and video game cosplay. I am sure you have worked really hard on your Cloud Strife or your Full Metal Alchemist costume, but it's not appropriate. If you are gung-ho and showing off your costume, try a fantasy based anime or one that takes place in a Medieval or Renaissance style world or time. Wolf and Spice is one that comes to mind, Record of Lodoss War (thanks Ed!) is another. Or even older (NES releases) Final Fantasy Games (We saw a White Mage when we went, and it was pretty cool. The Princess Leia Slave, not so cool). I will acquiesce to some things, considering that a lot of pirates tend to look like they have come from the 18th century rather than the 16th. And they all look like Jack Sparrow. And last year there was an AWESOME Capt'n Jack, who NEVER broke character. He was probably drinking real rum from his bottle.
So, really - this is just my opinion, if you want a Halloween costume for a day go for it, just choose wisely. I have listed below some of my favorite sites that offer all of the different types of Renfaire costumes I have talked about.
The Very Merry Seamstress - Excellent high quality, hand made costumes, ranging from affordable peasant costumes to gorgeous, elegant courtly costumes. They also will take custom orders.
The Tudor Shoppe They sell some pretty nice items, some are available on other sites, some are not.
Aurelias Regalia Again, very nice costumes and quality, plus a nice selection for more fantasy style outfits.
Medieval Collectibles I really like this site for it's HUGE selection of, well, everything. My fiancee got pirate pants and boots from here, and we both got ring belts. We love our items and we both highly recommend this site, especially to someone new at putting a costume together.