1. Annoyingly complicated. "DWIM is incredibly hairy." 2. Incomprehensible. "DWIM is incredibly hairy." 3. Of people, high-powered, authoritative, rare, expert, and/or incomprehensible. Hard to explain except in context: "He knows this hairy lawyer who says there's nothing to worry about." See also hirsute.
There is a theorem in simplicial homology theory which states that any continuous tangent field on a 2-sphere is null at least in a point. Mathematically literate hackers tend to associate the term `hairy' with the informal version of this theorem; "You can't comb a hairy ball smooth." (Previous versions of this entry associating the above informal statement with the Brouwer fixed-point theorem were incorrect.)
The adjective `long-haired' is well-attested to have been in slang use among scientists and engineers during the early 1950s; it was equivalent to modern `hairy' senses 1 and 2, and was very likely ancestral to the hackish use. In fact the noun `long-hair' was at the time used to describe a person satisfying sense 3. Both senses probably passed out of use when long hair was adopted as a signature trait by the 1960s counterculture, leaving hackish `hairy' as a sort of stunted mutant relic.
In British mainstream use, "hairy" means "dangerous", and consequently, in British programming terms, "hairy" may be used to denote complicated and/or incomprehensible code, but only if that complexity or incomprehesiveness is also considered dangerous.