I don't have desert experiance but I do go out on boats in the blazing sun and hike in the hot sun. I like a loose fitting long sleeved cotton or cotton/poly blend shirt. I have also worn loose drawstring hosptial scrubs. These keep both the sun and bugs off of me.
I didn't have to worry about it getting cold at night though. If you are hiking you should be able to carry other things in it for night or when the temps go down. I don't know how this would work, maybe someone else could chime in but a marmot driclime windshirt is very light and comfortable to sleep in when it's cold. I have worn one at night to extend the temp range of my sleeping bag.
Damp cotton would be cold and uncomfy to sleep in but isn't it very dry in the desert? When my husband was in the marine corp he loved going to yuma, he said you could run and you didn't really feel hot and didn't sweat. Well you did but it dried real quick.
I got a couple of those nylon fishing shirts thinking that all the vents would be cool and it would be even better than my cotton shirt. I am so glad I brought something else to wear because when the sun beat down on that nylon it was hot and stifling. I put my cotton shirt on and all was well. The nylon ones are also cold when it's cold. My fishing friends seem to like them though. They are just dressy shirts for me now.
I have some duofold tshirts of various styles and they are ok. They are polyester. Polyester is funny stuff, it takes on differant properties depending on the knit. It seems to take on a stench pretty quick though. I think they are making odor resistant ones now, maybe I should look into that.
Funny thing about the nylon. The shirts are not comfortable but my nylon shorts are just fine. At least the brands that I have. I don't have an explanation for that phenomana except that perhaps chafing. Cotton shorts chaff if you are walking in them when sweaty.
The hospital scrubs are best in some situations. You have to get the cheap thin ones though, at least that's what I prefer. The drawstring is comfortable under a pack belt and like I said, keeps the sun and bugs off.