Yes, we still use the word but rarely for the clothes themselves.

"Det klæder dig"= it looks good on you, "it" being anything from a dress or suit to a new hairstyle.

"De klæder dig"= is the same only for plural things like shoes or jevelry.

"Jeg klæder mig på" = i am getting dressed.

Nowadays it is usually a verb rather than a noun.