On our recent MR cruise, some people dressed up a lot, some a little, some not at all. You won't feel strange no matter what you choose. BUT...we did go all out, all of us dressed up in costumes and we had SO much fun. It was great for photos, and we got tons of compliments from everyone on board.
I have a great photo I wanted to post, but photobucket seems to be down for maintenance right now so I can't add it.