By wearing my old clothes that I didn't give to her, what is she trying to accomplish?

Who knows what she's thinking...sounds like she's a bit off her rocker. Maybe she thinks she looks good in them, maybe she is competing with you in her own way. Just tell her she looks great and don't even act like they're your old clothes...pretend you don't recognize the clothes. If you do that she'll like you better because of the compliments and maybe she'll stop trying to be better than you.