What makes for good olive oil?
The problem is that there are different types of olive oil that are used for dramatically different purposes.


A high quality 'cold pressed extra virgin' oil often has fruity notes that are destroyed when you heat it, but is great for drizzling over things at the last minute, or cold applications such as salad dressings ... but note that the US labeling laws are lax, so something labeled as 'extra virgin' in the US may not qualify as such in Europe.
For most cooking, I use a good grade olive oil ('virgin', but not 'extra virgin') for cooking with, not the extremely expensive stuff.
For frying, there's 'extra light' olive oil which has a higher smoke point but little to no flavor on its own.  It's refined to such a point that you might be better off just going with any neutral flavored oil (canola/rape, soy, corn, etc.)


Price depends on a lot of things, and a lot of it's marketing and worthless -- if you can, I'd look for other signs of quality ... like if there's a packing date.  Older oil is more likely to have deteriorated, and in a worst case, have gone rancid.  (more likely if it's in a clear glass bottle ... if you're buying large amounts of oil, keep it out of sunlight, or even better, buy it in a can)  Note that packing dates can also be cheated -- they might press the oil, then hold it for months before it's actually bottled for sale.

Also beware of 'blended oils'.  This is when they cut olive oil with something less expensive, but still try to pass it off as 'olive oil'.  

'Imported from Italy' is another suspect label, as it might be foreign olives that were sent to Italy before being imported.  (but there's nothing wrong with non-Italian olives ... the Greeks and Spanish make some great olive oils, and we're starting to see more American olive oils).

...

Also note that olive oil can be classified like wines -- some companies might press a single variety of olive (eg, Kalamata, Castelvetrano), which can have dramatically different flavors.  They might be fruity, grassy, buttery, or even peppery.  Regions can also have an impact, as some areas press olives while green, and others wait until they're black.

I won't get into these, as that's more a matter of personal taste.