Mud bricks are becoming more and more popular as a decent and environmentally sound building material. I've heard of people who built their own house with mud bricks, in fact. It takes forever, because they make each brick themselves. But it looks lovely, usually because the house is truly a part of the landscape around it.
I think they must have some cladding as well.
I know in some countries they just plaster more mud over the bricks, and continually patch it up after the rainy season.
But that would only work in countries where it didn't rain for most of the year. In countries where it does, the walls would dissolve really quickly.