Kotaku's got an interesting mini-post and graphic up discussing the history of hair in video games. More specifically, the history of bad hair in video games. As they point out:
Hair is one of the most difficult features of the human body to render accurately. Not only are there 100,000 pieces of it to account for on the head alone, each piece has unique behaviors and textures that dictate how they work together to give you that stylishly tousled look.