I keep my helmet graphic off for PvP purposes, but most of the time, a lot characters have their heads all covered up. Even if they weren't, do you really remember if your Tauren buddy's horns are curved or straight? Or if your Troll guildie has green or orange hair? I'm willing to wager none of your friends remember what kind of haircut your Human Priest has, or what color it is. With few exceptions, even if players choose wacky, colorful hairstyles, most of us won't notice. I don't even really remember if my Rogue Arena teammate has a lower jaw. We simply don't pay enough attention to other people's characters for it to matter.
On the other hand, new hairstyles will probably make us happier with our toons. My wife's looking forward to playing her Priest again, after regretting a hair choice she'd made ages ago while Daniel is excited to get royal purple samurai hair. Even if other players won't really remember how you look, the important thing is being happy with the character you play. The paid name change, for example, is one character customization feature I'm still happy about, even though I have yet to take advantage of it (my customization budget tops off at $10). So while the dances will be something everyone can appreciate the next time someone plays a piccolo at the Auction House, new hairstyles will be something more personal. Even if you cover it up with a helmet, at least you know no one can mess with your new 'do.