Hair is a tough nut to crack. One of the biggest problems with creating realistic hair is that there is usually so much of it. The average head has tens of thousands of individual strands. Modeling the hairs individually is nearly impossible. Even if the strands were modeled, animating them multiplies the problem.
At this point, no single vendor has the ultimate solution for creating and animating hair. The only way to efficiently animate hair today is procedurally, using any number of automated tricks and techniques to get the hair to behave. As machine speeds proceed into the stratosphere, this will probably become a moot point and hair will simply be animated though sheer brute force. Until then, here are a few techniques that can be used to animate hair.
If you really want to tough it out, you can actually paint hair frame by frame using photographs of hair as textures. This usually works only on short shots with short hair because long shots will require more automation and long hair needs to move more realistically. Typically, this method is used when compositing into a live action shot, such as the mouth replacement on any show where a dog or cat is talking.
When considering this method, remember that the hair that really gets noticed by the viewer is the hair at the edges. This is the hair that filters the light and gives the eye its information about the volume and consistency.