I have found a decent solution to the hair issue that started this thread. I used the technique described in the following video. (I did not make the video.)
http://www.youtube.com/watch?v=WN1g8fL_tSk&feature=colike
It is similar to the node set-up being used here. Essentially, you have to create a black and white version of the hair texture. Plug that into the transparent shader. Then use an add shader instead of a mix shader.
