When I had my hair algae problems, I built a refugium into the system.
For details on this, refer to pg. 34 of this thread.
http://www.canreef.com/vbulletin/sho...=28436&page=34
Anyway, this is what the "refugium" has turned into. It has become a lot more like an "algae filter" than a refugium. As near as I can see, there is nothing living in the refugium at all except for hair algae and cyano. It is truly disgusting. If I didn't scoop frothy cyano off the surface every week or two, the entire surface would be covered.
There is still a lump of chaeto in there, but it is completely engulfed by cyano and hair algae.
There is no cyano or hair algae in the display tank, so it would seem that this system is working perfectly. Using the best testing methods I am aware of, I cannot measure any nitrate or phosphates in my system.

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400 gal reef. Established April, 2007. 3 Sequence Dart, RM12-4 skimmer, 2 x OM4Ways, Yellow Tang, Maroon Clown (pair), Blonde Naso Tang, Vlamingi Tang, Foxface Rabbit, Unicorn Tang, 2 Pakistani Butterflies and a few coral gobies
My Tank:
http://www.canreef.com/vbulletin/showthread.php?t=28436