Today is the feast of Ss. Peter and Paul, when the Holy Father bestows on new Archbishops the right to wear the pallium. Use of the pallium dates as far back as the 4th century. It seems that, from the beginning, the pope alone had the absolute right of wearing the pallium. Its use by others was tolerated only in virtue of the permission of the pope. We hear of the pallium being conferred on others, as a mark of distinction, as early as the sixth century.The modern pallium is a circular band about two inches wide, worn about the neck, breast, and shoulders, and having two pendants, one hanging down in front and one behind. The use of the pallium is reserved to the pope and archbishops, but the latter may not use it until, on petition they have received the permission of the Holy See. Bishops sometimes receive the pallium as a mark of special favor, but it does not increase their powers or jurisdiction nor give them precedence. The pope may use the pallium at any time. Others, even archbishops, may use it only in their respective dioceses.
The New Liturgical Movement has recently pointed out a change at the basilica of St. Paul Outside the Walls, where the mosaic roundel depicting Pope Benedict XVI in the pallium, designed by his former MC Msgr. Piero Marini, hung from 2005 to 2009. It was recently updated to show the Holy Father in the (proper) pallium brought in by his new MC, Msgr. Guido Marini (my favorite!)