This patch enables 2.5 hair collision based on the currently used cloth collision algorithms, and adds UI controls to the hair dynamics settings, to allow some tweaking.
I did not do any research on algorithms, but just forced the existing stuff to work on hair - probably a horribly dirty hack, but I need things to work, and maybe there are others who do.

What I changed, in one line:
made hair strand edges appear like triangles to the simulator (by creating triangle faces (v1,v2,v2)), and fed that to the existing algorithm.

Built on Ubuntu 10.04 only, but suppose it should work for other platforms, too, as the changed code parts didn't look like they had any platform dependencies.