Gahhh!!
Long overdue Hair Walkthrough/Tutorial!!

Features Timeless [link]

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Adobe Photoshop CS2

Edit: Someone asked for help with step 3, and I realized that what I originally had was a pretty bad explanation, so I'll just post the one I gave her.

Step 3
The essential thing about step 3 is creating strands of different depths so that the hair looks like it has clumps of different thicknesses.

The first thing to do after the base is create a new layer on top of the base and select the eye-dropper tool. Using the eye-dropper tool, try to choose the lightest strands of hair you can find (it's much easier to work from light to dark than dark to light, in my opinion).

After the color is selected, choose the brush from the toolbar. Make sure the brush settings are set to default and that the brush that you use from now on is "Hard brush" (it's usually the first couple brushes in the brush menu). Choose that brush in size 5.

Now with the pen tool on the path setting (make sure it's not on shape settings), create single paths that go over those clumps of hair where the lightest strands are seen. By single paths, I mean paths that aren't closed. It has a start and an end, but the ending point isn't the starting point. To make multiple strands, what I do is create the path and then click the pen tool in the toolbox again. That usually "deselects" the path that you were working on and you can make a new path on that same layer. Just make sure you don't touch any other points when working on new paths or else they'll end up joining each other.

Once your paths are all set, press the pen tool again to deselect all the paths. Right-click>Stroke path. From the drop-down menu, choose "Brush" and make sure the box underneath labeled "Simulate Pressure" is checked. Click OK.

Make sure the paths that you stroked are indeed stroked with the right color and brush size, if they're not, you can still change the settings with the paths still on the screen. If everything's correct, press the "Delete" key on the keyboard and that'll get rid off all the paths you've made.

As the brush size decreases, the number of strands increase. When starting with 5, go a bit easy on the strands. When ending with 3, cover a wider range than you did with 5 (see step 3b in the tutorial compared to step 3). Each different width stroke should be on it's own layer as in, after you're done with brush 5, make a new layer for brush 4 and so on.

You repeat all those steps using darker colors each time. Try using a "gradual gradient" type-deal when going darker. You want everything to blend well and don't want any significant jumps and have none of the strands mixing smoothly.