I find that a lot of the time, people (myself included) may love something a bit on the outrageous side, yet feel a bit silly or embarrassed wearing it. Not the case at the Kentucky Derby.
I have been to horse races since I was probably seven, but i definately don't remember any of the ladies being as fashionable as Audrey Hepburn in My Fair Lady. However, this tradition of lady's hats at horse races hasn't disappeared.
For Derby hats check out http://www.hatsandveils.net/. I'd love to include some photos, but the copyright of her site won't let me. Also check of http://www.ladydiane.com/ or http://www.hatsbynancee.com/. (photos from the above sites and www.nancarrow-webdisk.com)