how are cycling jerseys and shorts suppose to fit?

If it's long enough and cheap I buy it.

It all depends. When I first started riding, I bought a jersey that fit fairly tight. As I rode more, it became a little baggy. In spring, it is always too tight. Same with the shorts, but not as much. I prefer it to be tight enough not to flap in the breeze and loose enough not to constrict movement or breathing.

Primal Wear and a lot of the biking sites have sizing charts. Each company is a little different, but in general I find that I have to go a size up when I buy cycling gear. Whatever I wear in regular clothes (L shirts, for example) I have to order XL in cycling.

They will be snug, but should not make you feel like you have a latex paint job...

Regarding the way they should fit: yes, the top should be a little snug--not cutting-off-circulation snug, but tighter than a regular t-shirt should fit.  And the shorts should simply be skin tight...think Tour de France, but with slightly looser tops for most of us wanna-be cyclists. 

Regarding the actual fit of jerseys: yes, you'll find that most cycling gear will be tighter if you go with your regular t-shirt size.  As someone else said, up one size should get the job done, but most companies do have sizing charts so go by their charts as I've found they can be all over the spectrum...I've bought anywhere from medium to XL with the jerseys. 

One other thing: European companies tend to run smaller than US companies (smaller as in 'slighter', built for narrower frames), and you'll see it in their charts.  I have--for a cyclist--a pretty large upper body with wide shoulders and find that the Euro manufacturers just don't tailor their jersey's to the fullback/linebacker type frame.  Keep that in mind when buying jerseys because while you can always just size up, if everything is made for slighter frames then you're also getting a jersey that is simply too long, something I've found with a few Euro jerseys.

post pics

+1

I have had the most problems with the arm circumference.

The best idea would be to try something of the same brand on; that's what I did. The jersey that I tried on was a medium, constricting my arms way too much, so I bought a large online because they didn't have one in the store.

At the very least, as Brownie28 said, go by the sizing chart.

Also from what I've heard, the 'best' jerseys will feel awkward fitting while standing up b/c they are tailored for riding position.

One thing to understand about jersey sizing is "club cut" vs "race cut".

Race cut is the slim, "Euro" fit, which is why it's common in European cycling clothes. Sized for the Euro cyclist with the classic cyclist body - thin, wiry, not much upper body build.

Club cut is the more relaxed American fit. A club cut is not loose or baggy, it's just a little more boxy cut in the body and more room in the shoulders. Sort of the same as a fitted dress shirt vs. a regular dress shirt.

I understand a set-in cut refers to the way the sleeves are attached, I believe it gives a little more room in the shoulders.

I have a taller, thinner build (6', 168 lbs) so race cut often works better for me than club cut, especially if the club cut is on the looser side. I always have to try them on; about half are medium and about half are large. I have a couple things from Pactimo that are very tight at Large and I wish I had bought XL.

As long as it doesn't fit like this: http://media.photobucket.com/image/lampre%20kit/RedCon1/fatguyinspa...