Not all video cards can handle those aspects, there is a way to make the hair appear but I dont know if it will work or not. Check the topic called How to get hair if you want to force your computer to generate it.
I had the same prob. Kays told me to mess with the graphic.config file in data. Open it with a notepad or something like that. Find your card, and put it to 3 0 3. That'll be max. If it freezes, change them to a lower setting. keep doing this until you are happy with the results.