I have been trying to investigate this a bit and have found many suggestions/potential causes for this condition. Some definitive, some just possible causes.
1. Moisture build up in the oil from "short trip' driving not allowing the engine oil to get hot enough to evaporate water build up.
2. Coolant leaking past the head gasket. This is identifiable by loss of coolant level and/or a "sweet" smell at the exhaust pipe.
3. Oil level over full. Can result in crank journals "over agitating" the oil causing foaming.
4. Oil additives (OEM) there was some suggestion that certain additives added by the oil manufacturer can cause foaming. Zinc was singled out, but it wasn't clear whether is was high or low levels of zinc that were suspected of causing foaming.
5. Oil additives (Aftermarket) the addition of aftermarket oil additives can dilute the OEM additive package, in particular the anti-foam agents.
6. Engine component material. There was a blog on white foam/sludge build up occuring in the dipstick tube on a particular model vehicle (Toyota if I recall). The general concensus was that the dipstick tube was made of plastic, and was positioned such that it was subject to the flow of cool air entering the engine compartment. This combination of plastic material and additional cooling would prevent the dipstick tube from reaching the same operating temp as the metal components of the engine, and could be the cause of white foam buildup. So the theory of plastic valve covers may well have some basis.
7. Plugged PCV valve not allowing the cranckcase to vent.
The good news is, with the exception of #2 coolant loss, popular opinion is that there is no real reason for concern unless the oil in the pan is also milky colored in appearance. This is an indication there is too much water/contamination builup in the oil itself.
Modified by just4fun at 2:08 PM 1-1-2009