The problem is that results in a skullcap that's too high-res.  Dynamic hair works best in a low-res skullcap. 

PhilC has free skullcaps at his site, but they are also really high-res.  About 3,000 polys.  If you check the skullcaps that come with the P6 dynamic hair, they have only about 200 polys.  I've even seen people use really low-res skullcaps - 8-20 polys.