As far back as Ultima Online, and even in some MUDs, you could dye your clothing, or craft colored armor. While Ultima Online had simple 2d graphics with nothing more than skin tone and hair style to pick from at character creation, you still saw more variety in players.
I believe that the key to abolishing clones is not "extra sliders" on the character creation screen, but rather more aesthetic options during the span of a character's life.
Take the complaint in WoW about non-matching gear making characters look like clowns; if gear could be dyed to match, it wouldn't matter if you were wearing an unmatched set, it would appear to match.
By offering players more variety in their appearance, you could also alleviate another growing problem, inflation.
Ultima Online had a serious problem with inflation, one thing they did to help this was to add a gold-sink in which players would drop more gold into the game, and not into another player's hands. This gold-sink was neon hair, and it cost 500k to dye your hair a neon color, and another 500k to dye your beard a separate color.
This was a substantial amount of currency at the time, but people still paid to have the ability to set them selves apart from the crowd, and show some social status at the same time.
Right now the biggest gold-sink in World of Warcraft is no doubt the epic flying mount, but it's still a one-time purchase, and doesn't set you apart from the crowd.
By adding armor dyes to the game, and having ONLY npc's sell them for a large sum of money would solve two problems WoW currently faces, Clones & Inflation.
If you had the gold just collecting dust, would you spend it on such fluff that gave your player no real statistical advantage over others, but just set you apart from the crowd?