As far as my knowledge is aware (What with me being a male and all), Slips are essentially "Underdresses". Kinda like Boxer Shorts are for men. Now a days, they act kinda like a Night Gown.
I know for their function in Vampires of Venice, since this was before the bra was invented, they were used in much the same fashion as a Bra and Panties were. So yes, the women were effectively parading around in their underwear (For sixteenth century Italy).