My son will be three in March and he still has cradle cap. I think it's just the way his scalp is. However, we did find that massaging olive oil into his scalp and then having him wear a hat over it for a few hours worked wonders. We would then wash his hair and scrub with a wash cloth.
My guy is two now, and still has a bit of cradle cap, but it has gotten much better. I use olive oil. I put it on while he's in the tub, rub it in when my fingers, then comb the big flakes out with a fine comb. The more patient I am with the combing the better it is after. E has a lot of hair, and his hair would be greasy the next day even with two washings, but was fine after the next bath.
Re: Cradle Cap