The most important thing to know when illustrating hair is to draw the hair as it grows and flows, as you'd brush it, roots to ends. Hair should not be colored as a solid mass of flat color. Also pay attention to the color variations and the shadows. Flip through a magazine or pick up some personal photos and look at the hair, there are deep dark shadows, the darkest of which are around the neck, and bright highlights on the top and sides where light hits.
I've drawn these three girls to clearly show you my process. First I draw a pencil sketch. Secondly I apply the main colors in marker. Then I polish her up and apply all shadows and highlights with colored pencils. Now if only styling my hair in real life was as easy as one two three. :)
You can also check out my Doodle Darlings to see line drawings of different hair styles, which you can look at as a base, before coloring, like the pencil steps shown here.