Here are 2 links to threads on cgtalk discussing fur in games. The first one deals with the fur used in Shadow of the Colossus (without the use of shaders). In the thread you will find this link which is very interesting (go read it! ) it is about the techniques used in SotC including the fur creation (but also, fake hdr, motionblur). And this threads is made by someone who modelled klonoa with fur, there are some experiments in the thread.
) it is about the techniques used in SotC including the fur creation (but also, fake hdr, motionblur).