The dress up room is located above the Moshling Garden. Once you buy some clothes at the Marketplace, you can dress up your monster for friends to see when they visit your monster. You can create little buddies as well by left over clothes. Use a pom-pom or hat for head and then buy two earrings for arms. Put glasses on them and add a Make-A-Human Nose. Buy some Poppet or Katsuma shoes and put them on the bottom.