daughters 1 an 2 had it and i didn't fancy the olive oil thing and the shampoo smells baaad i just left it and gently brushed their hair after washing it and bits came away some times. the rest just semmed to clear up by its self, daughter 3 hasn't had any so far! but she has way less hair than the other 2 did!
I was told the olive oil thing too and I gave it much thought and by the time I had done thinking the cradle cap had all gone! The only conclusion I can draw from this is thinking clears cradle cap - particularly slow deliberated thinking! So have a ponder!