Here's my update:
I finally finished that puppet, and I'm quite satisfied with the hair... and very protective of it. I purchased some loose synthetic hair that hadn't been attached to a net yet at a wig store for $3 US. Then I went through a complicated process of attaching the hair in sections to some "plates" of the same fleece I had made the puppet's head out of using the sewing machine and my new best friend, duct tape. Then I hand-stitched the plates together and down the middle of the head.
After all that, I put the hair in a pony tail and cut off the excess. I fastened the hair up in the back using a button and a tie-strap running through the head. Then with a styrofoam ball and the excess hair I made a fake bun, inspired by a thread-covered Christmas ball ornament. I attached it to the head same way, and now the hair is permanently fixed! I'm still paranoid that something's ging to happen to it though, so when it's not in use I'm keeping a shower cap on it.
Here's some pics of it (they don't focus too much on the hair,but you get the idea):
http://groups.msn.com/purepuppetry/shoebox.msnw?action=ShowPhoto&PhotoID=9
http://groups.msn.com/purepuppetry/shoebox.msnw?action=ShowPhoto&PhotoID=8