Will regular hair still grow around a transplanted hair?

Regular hair will grow
around transplanted hair. One may experience shock loss (temporary hair loss)
in the first few weeks. This occurs as part of the healing process
and reaction to the trauma that the scalp underwent. One should typically recover from Shock Loss within 3- 6 months of onset. However there are
reports of permanent loss. Hair that is already thinning are more susceptible
to shock loss. There are medications that can be prescribed to minimize permanent
loss of native hair. Click on the link below to read more about shock loss:

"Regular" or native hairs should grow next to transplanted hairs.  However if these native hairs are genetically programmed to fall out, it will eventually fall out and transplanted hairs will only remain.  

Yes, hair will grow around the transplanted hair although there is a chance of temporary hair loss in these areas due to the shock to the hair follicles near the transplanted hair.  Propecia will help to protect both the transplanted and native hair follicles.