From WebMD:
Overnight "home remedies" such as mayonnaise merely appear to kill lice, but don't because the bugs are able to close their spiracles long enough to survive. This is called the "resurrection effect" because, after rinsing, the lice thought to be dead are able to open their breathing spiracles and start biting again.
Existing over-the-counter head lice treatments contain neurotoxic pesticides as active ingredients, resulting in potential toxicity and other problems, including lengthy applications, odor and ineffectiveness.
References:
Losing the Lice Without Losing Your Wallet. NYTimes, 2010.
Image source: Benzyl alcohol, Wikipedia, public domain.
Updated: 05/28/2010