Equipment changes in Shin Megami Tensei IV will be reflected in the character models. A new video posted to the game's official website shows exactly how this works. Atlus plays dress-up with the game's protagonist, showing off all the funny little hats he can wear.
Everything from clothing to shoes has its own graphical representation in SMT IV, and this shows in menus as well as in actual gameplay.
With the store-themed DLC they're bringing to Japan, the sky's the limit. We should get a Destructoid costume in there.
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destructoid's previous coverage: Shin Megami Tensei IV