From Beta Forum
Q: How do I make a ponytail or braid to a puppet that works with physics?
Hi! If you scope into the puppet by using L1 + x when over the puppet. Then if you use the paint mode to draw a pony tail on the head.
After finishing the pony tail grab it with R2 and while holding it scope into the head itself with L1 + x and it will be attached to the head.
For a finishing touch tweak the painting with L1 + square and go to the physics page and make it physical and it will move around like hair!!!