I had my hippie times and it looks real futuristic to be beads or anything braided- not to mention that it looks not attached but hanging
But seems like this is one of the fav issues of speculation on other LOST-related forums and blogs as well.
Screencaps and Easter Eggs: Alex's Ear Peice has something for every different opinion on this.
I find the "it's gotta be
Sennheiser ME2 Omnidirection Lavier Mic" speculation the most plausible. Google for images and it looks very likely to be the case.