LOL I get this question A LOT, so I thought I would work up some screen shots and post them here. Hope it helps some of y'all out!
First take a dress or skirt (any will do as long as it covers the head with some to spare so you can cut away a shape. I usually cut out the face and bangs first (above), cuz it's easier for me, but you can start however you like. Then cut the basic shape of the hairstyle you want (below)
After you have the shape you want, carefully cut away all the dress/skirt so that all you are left with is the shape of your hairstyle! (below)
Now you can just select and delete the opacity cut and change the color as you like. The paint and stamp decos are used for textures and shading (below). Use the filters menu as well. The stencil and 3-D filters are GREAT for making hair textures. It takes practice, practice practice. Try different color combos, opacity levels and filters to experiment and see what YOU like! But these are the basics! =D