I totally disagree with that.
Now that I've seen that picture, I think I disagree with myself as well.
I only had it turned on in White Orchard proper to see what it looked like on the characters in a somewhat crowded environment. From there, it didn't seem to make that much of a difference visually, but gave me a pretty substantial drop in framerate. Though after seeing your shot of the wolf, and some other shots I just checked out because of it, it does make some of the monsters look considerably better.
I'm going to try out tweaking the .ini file, and see how it looks.
edit: did a quick test. It's not the most scientific thing around, but with the hair shader set to 2x AA, it seems to lose about 6 FPS, give or take.
Hair Off
Hair On
At the very least, the fancy hair does seem to lay on the model far better.
Also, I noticed they had Ubersampling in the .ini file. I'm kinda tempted to turn it on, see how good it'll look...and just how badly it'll run.
edit 2: Okay, turned on ubersampling. Didn't do a thing. After running around a bit, I've come back to my original conclusion. Geralt's hair looks a little better, but townspeople are about the same as before. The monsters are a different matter entirely. I fought some wolves, and they did look more, well, fluffy, but I'm still left wondering if it's worth the hit.
HairFX might be better served for cutscenes than gameplay.