Wash the hair often with a baby shampoo, and if you got one of those soft scrubbers from the hospital use that. Also, when the hair is dry, use a soft brush to loosen flakes.
I tried everything with my DS and the only thing that worked was oil. Someone told me olive oil but it's expensive so I used some other cooking oil (don't remember exactly what we had on hand) and it worked! I rubbed it in very good, used a comb to comb out the cradle cap flakes, then rinsed and rinsed, and then shampooed with regular baby shampoo several times. It got all the cradle cap out and it did not come back after that at all (he was about 6 months old or so at the time).
Re: Cradle cap