I've read most of the comments and I have a few thoughts:
1) If her style is a significant problem for Modgrl's friend, perhaps she is not the lady for him.
2) If he is fine with her as she is but would love improvement there is hope
3) Use positive reinforcement (compliment her when she wears things he likes)
4) Set her up to win: Dress up date night!
Back to #3.
I love the idea of window shopping, looking at magazines, etc. I don't think there's anything wrong with saying, "Wow, I would love to see you in a dress" or "This would look great on you!"
IMO, it's one thing to lament your partner's style and quite another to expect them to change it. My DH has terrible style. We have been together long enough and our relationship is rock solid such that I *can* tell him when he wears something I truly dislike without hurting his feelings. I have accepted him as-is and though I would love to see him dress better clearly I will love him no less if he never does. He does enjoy nice clothes but often just doesn't want to bother thinking about it. It's more effort than he wants to make.
In a new relationship especially I would DEFINITELY stay away from any punishers - I don't like, why don't you, I wish you would... It will only create distance and hard feelings. Modgrl's friend should consider, what if she never changes her style? Can he live with that? If the answer is yes, then I'd say gentle encouragement and lots of compliments are the way to go. If the answer is no, then I guess dating her for as long as it's fun is great but ultimately they will probably part ways.
FWIW, I didn't give a fig about DH's style when we first started seeing each other. It was worse then than it is now (marginally anyway), and in fact when we first met we were both in military uniforms (BDUs). If DH didn't -need- grubby work clothes, we'd be in great shape these days. My only problem is when he wears his grubbers on days off. Why oh why? Well, cos they were within reach. That's about the long and short of it with him.
Love that guy.