dtgreene: The Sexy Dress is just a piece of armor usable by some of the female mercenaries that, when used (you can use any item you have equipped)
, kills the caster and restores 75% of everybody else's HP. You don't get to see what it looks like, however.
WBGhiro: That doesn't sound very sexy, but thank you O great oldschool RPG Sage for the detailed answer.
I remembered one other fact about that series that you might find interesting.
In the previous game in the series, called Paladin's Quest in the US, there is an item called "Adult cl". There is one point in the game where, as soon as you leave a certain building, a man (who is attracted to the woman in the building) attacks you, and he occasionally drops this item. It can only be equipped by the female sidekick, and it is a nice piece of armor despite having only 3 defense; it boosts all of her magic skills, it reflects half of all physical damage (you still take full damage, but this is incredibly handy during the final battle), and it fully heals the user when used.
I wonder what this item was in the Japanese version.
By the way, Lennus 2's Sexy Dress can be bought; it's tied with the Great Mallet for being the most expensive buyable item available in a store (IIRC, and not counting what you can buy in the final dungeon from a robot that isn't a shop), but the game lets you buy it maybe around the midpoint of the game or earlier. (There is a major city that has shops that sell all sorts of equipment, allowing you to get items that a typical RPG wouldn't give you until fairly late game much sooner than you would expect.)