Hmmm... Okay, I may not have explained well enough.
I don't want to upload the photo. I want my customers to be able to upload a photo of themselves and then I want them to be able to choose different products from my store (wigs). Once they select a wig, my website will place the wig over top the photo they uploaded.
They can then drag the wig around over the photo, and scale it as if it were in photoshop or fireworks.
The purpose of this webapp or whatever you want to call it will be for customers to see what a particular wig will look like on them.