Why shouldn't you wear baggy shorts?
Baggy shorts can rub the inside of your legs and could cause some discomfort after a few miles. There are running shorts that are baggy and they may work for you.
I really don't want to wear cotton because it holds moisture, sticks to me and causes more discomfort. Personally I do all of my running and biking in my Desoto tri shorts
Shoes that are a year old may have lost their cushioning, be carefull with them. Personally I would go to a running store to get some shoes if you are serious about running, there's no sense in hurting yourself early. Let the people there help you. If they sound like they don't know what they are talking about then go to another running store (not footlocker, they are a fashion shoe store)
Start easy, a heart rate monitor will give you an indication of your intensity. There's no need to be blasting on the run when your endurance isn't there. Try a few miles at a time. Give yourself a day of rest before the next run and see how you feel. There's a lot of time over the winter to train correctly so don't be in a hurry to build milage.
This book helped me a lot with my running
http://www.amazon.com/...s=books&v=glance Have fun while doing it.
jaretj