To add the hair to the babyFirst make shure you have at least the 2.53 version of the baby.
Rez the baby and the hair on the floor next to each other.
On the edit menu of the baby click "Hair" and accept the dialog asking if you wish to merge the two objects.
If everything went right the Hair will be merged with the baby, rezise itself to fit on your baby and move to the correct position.
This process is know to fail in some SIMS because of a reported bug. If this fails, try again on another Sim or merge it manually .
For merging the Hair Manually:Go to edit mode / build mode on the viewer
Select first the hair and then the baby (with crl key to maintain the selection) ITS IMPORTANT THAT IT SHOULD BE IN THIS ORDER
Link them together ("Link" under tools menu or Crl+L under windows)
The hair itself uses just one prim, but the total amount of prim usage is reported as of almost 10 more prims. The actual cost on the server is currently unknown.
I will try to add a video tutorial shortly to make the process clearer
Changing the Hair color
Once the hair is merged the "Hair" button under edit on your baby´s menu is used to selecting the hair texture. Prim hairs comes with 8 texture colors plus a custome slot for bought or custome made versions.
Custom hair textures can be made downloading the PSD files available shortly on this same blog. To apply your own custom made hair to your baby, uploaded it to SL and apply it manually over the hair as any texture on SL. The hair design will be stored by the baby on the custom slot so you can change between all the hair designs.
To apply a 3rd party hair design, just apply it using the same method as if you where adding a skin. It will save it under the custom slot.
A new update on the design studio will be available shortly to add the support of selling hair textures, so make your imagination run wild and edit the hair in any way you wish.