I was just talking to Juuso (known as RSCosworth on GTP) on MSN, and he explained a couple of things to me, and sent me a screenshot of what happened.
First of all, he and his friend Teemu (also known as MadHypello on GTP) were playing 2 Player Free Roam, and Teemu sliced off Juuso's head with a Katana sword. Juuso was 1 Player, so when he respawned wherever the 2 Player icon was. Now, the funny thing was, Juuso respawned without his head!
When walking around, or riding a bike/bicycle, blood kept spurting everywhere, leaving trails of blood behind him. They didn't try and find a way to fix it, as Juuso loaded up. I'm thinking possibly getting changed (or just putting on facial clothing) or getting a hair-cut could fix it. Possibly saving and loading up.
Either way, a weird glitch that apparantly happens every time.