In general, Old Navy's clothes are crap. The poor make, poor fit and poor styling turn most people off of the Gap's bastard child.
Yet somehow, I always score big at the retailer. Here are my tips for shopping down:
Try everything on. Sometimes, the most boxy, unsophisticated piece will look rad off the rack and on your body. I have a tshirt dress -- from this summer -- that I paid $12 dollars for and looks better than anything else I own. It fall just right.
Don't buy pants. Old Navy pants never fit right. They don't look good on any body type, the sizing is incredibly skewed and the styles are horrific. Simply avoid.
Stick with cotton. Fabrics like velvet, wool and satin don't translate well in the low-end market. They just look cheap.
Never pay full price. If you pick up incredibly inexpensive pieces at Old Navy, spending a pretty penny on loftier brands won't feel so wrong.