I've heard about magic underwear. What's up with that?
Adult Latter-day Saints who have been to the temple make sacred covenants to follow Christ. There, they receive what is called a “garment” to wear as a personal, private reminder of those covenants. It’s related to the Biblical concepts of priestly robes and vestments and “wearing the whole armor of God,” with the garment itself representing the garments God gave Adam and Eve in the garden of Eden.
The temple garment is modest underclothing. It’s not exactly Calvin Klein, but it’s not necessarily funny looking, maybe just a little more modest than usual. Promoting modesty is one of the intentions, I think, in addition to remembering covenants of integrity and virtue.
Mormons are not unique in the wearing of special clothing for religious purposes. Perhaps the most well-known example is the yarmulke, which is worn at special times by many Jewish men or at all times by devout orthodox Jews. Similarly, in some religions a minister or priest might wear a special collar that has religious significance, or nuns may wear special clothing that signifies the religious order to which they belong. In all cases the special clothing reflects the religious conviction of the wearer.