Olive Oil can be substituted for butter or solid shortening in most baked recipes, and it can dramatically cut the cholesterol and saturated fat found in most desserts.  This chart will help you determine how much olive oil to use.

There are some times you would not want to use olive oil instead of butter.  If you want something to remain solid at room temperatures, for example with cake frostings, it would be better to use butter.

Generally it is best to use a mild-flavored olive oil that will not distort the flavor of the baked goods.  For heartier desserts, like brownies, you could use a stronger tasting olive oil.