Insulation Layers: (Traps warm air against body.)
An insulation layer is any garment that provides a space for trapped air to remain warm and stay relatively free form convection currents.
Poly Fleece is the classic insulation layer. Its thick, dense, wooly weave traps warm air against the skin keeping you warm like a wool sweater. A pair of pants and a long sleeve top, or jump suit, made from this material is the perfect outfit to wear under a dry suit or splash wear set.
Add an additional layer of wicking long underwear, made from capilene or polypropylene, is good for comfort under your insulation layer, while wearing a dry suit on top of it all. It will make you feel dry.
No dry suit? You can wear a wet suit, full suit, or shorts and a top as a foundation under your insulation layer for protection from immersion. This is not as good protection as a dry suit but better than just an insulation layer.
A vest made from poly fleece is handy as a warm up or extra layer.
Polypropylene tops are quite common water wear for kayakers and other water sports enthusiast. Polypropylene wicks moisture away from the skin.
Any wool garment can keep you warm even it is wet, but it will be very heavy and dry slowly.
Nylon and other synthetic clothing can act as light insulation layers but are used more often in the warmer months by themselves.
Cotton is not a good choice for water sports. Cotton holds moisture against the skin, dries poorly and facilitates evaporation.
Insulation layers can be worn by themselves in warmer conditions, but for colder weather they are more often used in combination with dry suits and splash wear.