The surfer wanted to stay on Earth and Galactus altered the Surfer so that he is now linked to Earth and is at peak power when on Earth and gets weaker the farther he goes from Earth. Galactus also gave him the power to shift from his silver skin to flesh at will. So yes, in flesh mode as it were, the Surfer wears pants.
Comics code and all that.....
If I am not mistaken, I believe that Surfer is not bound to the earth rather he is bound to Asgard (the earthly version) and the further he is away from Asgard the weaker he gets. I think Fraction did this so that the when the Surfer is adventuring with his Defender buddies, he would not be over shadow the rest of the team. If Surfer has his full power, his is more powerful then the rest of the defenders combine.