I have become an unwilling expert on the subject of lice, since I live with two huggy little girls. The essential oil treatment I described in an earlier post does work (especially with the mechanical action of meticulous nitpicking) but I have added a new technique into my regimine. Upon first notice of lice or nits I make a thick paste of diatomaceous earth, the same essential oils and cheap hair conditioner, which, in the shower, I massage into the scalp and hair roots. It cleans up any dandruff and (theoretically) kills critters because diatomaceous earth has sharp edges which cut into exoskeletons. Follow that treatment with: a oil/essential oil soak for 1-2 hours under a shower cap, shampoo out, rub baking soda into the hair to get rid of the rest of the oil, re-shampoo, condition hair as usual, then comb and manually nitpick. Meanwhile, you're tossing all bedding into the drier for at least 30 minutes on high to kill any critters.
We noticed lice 2 weeks ago. I did this treatment and checked hair every night for a couple of nights (a cozy, snuggly time, not bad at all) and then did a hair-check 7 nights later. All clean and lice free.
Kids roll around on the rugs at school, hug each other and get close: it's tough to eliminate infestations entirely but if you do the above (which takes several hours) upon first notice, you'll take care of the problem.