Head lice become established in the host's hair, where they feed on the host's blood once a day. The females lay about six eggs a day, which hatch in eight days. The baby louse reaches adulthood in nine to 12 days, and the cycle continues. Although lice raise a shudder in most of us, and conjure images of dirty, infected people, head lice are not a significant health hazard, and public health officials consider them much less of a problem in schools than pinworm, ringworm, and colds.
The fact is that lice are rather common in today's schools, even among "clean" kids. Some recommends the use of mayonnaise, though as the good zgirll points out, any edible oil will do. However, another way to eradicate lice is to break the reproductive cycle by removing the live lice before they have a chance to lay eggs, and removing the eggs before they have a chance to hatch. One simple, safe, and effective way to do this is wet combing daily with a fine-toothed louse or nit comb for up to two weeks or until no live lice or eggs are found. It's not the instant cure parents may be hoping for, but it works. Children with curly hair will have to have their hair straightened first.
There is a great deal of useful information on lice and their removal at http://www.hsph.harvard.edu/headlice.html. Wet combing is recommended as the first line of louse management there.