I've not had to take any kind of picture yet (since growing my hair long), but I'd definitely wear it down! The hair around my face would make my face look better... then if it was just my face.
I think I might wear mine down next time. Both my driver's license and my passport have older photos of me with short hair on them (add to that I really dislike the photos). I just used my passport in Aug-Sept and one of the customs guys really gave a double take when I handed it to him.
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