Common Problems:
~ When the texture is downloaded into SL the fringe doesn’t show (or is a solid texture)
Make sure that the Alpha Channel with your fringe on it (should be named Alpha 1 under the Channel palette) does not have the eyeball showing, but the other 3 (red, green, blue) do have the eyeball.
Also make sure that there is only ONE alpha channel.
~ When the texture is applied to the prim, the fringe looks very pixelated.
You may have too much contrast in your texture, or the texture is repeated too many times on the prim. Try having it repeat horizontally only once or twice to see if this helps, or lower the contrast between the colors on your texture (limit the lines or streaks as well if needed).
~ The highlights look distorted or washed out when I texture the hair.
You may have the texture stretched too far across the prim. Raise the repeats of the texture (try vertically and horizontally) to see if the texture needs to be redone, or if the prims are too large for the look you’re going for.