poly planes with alpha channels usually delivers the best method for longer hair, thats what FFXIII did (I'm pretty sure thats how all the FF's do their hair) for shorter hair just model it in the geometry. Edit* there was a link a while back on some behind the scenes stuff with FF XIII, i'll see if I can dig it up.
i realise that this can be largely dependant on the engine you're using, and how it handles alpha channels and the like. so here's the question: how do you handle hair? how would you go about recreating FFXIII style hair? are you satisfied with the current "limitations" when making it? what do you think could be done…
There was an app awhile back called FFXView that bwas real handy for examining meshes & textures from FFX. Nowadays 3D Ripper DX can do it from most any PC game. Great for edumacation.