Your baby has cradle cap if his scalp has brown, scaly patches. This is very common in babies and although it looks ugly and dry, it does not cause any discomfort to your baby. Sometimes, the cradle cap may spread as a rash to the face or nappy area. You must consult your doctor if the rash appears to look infected.
If your baby has cradle cap, massage his scalp at night with warm olive oil (or any other oil) and leave it on overnight. In the morning, comb his hair to loosen the scales and then wash the hair to remove the scales. You may remove cradle cap once but it may return again. The only solution which works to some extent is to keep his scalp well-oiled. If cradle cap appears again, you may have to repeat the oiling-combing-wahing process again.
You can even get cradle cap treatment shampoos over-the-counter. They are also quite effective. Infact, my little one has cradle cap and her skin is very dry and sensitive and baby shampoos don't suit her skin. I've been using the cradle cap treatment shampoo from the past 7 months. Apart from controlling the cradle cap, its also kind to her hair!