You may have heard of "cradle cap"--scaliness and crusting in areas of the scalp--which can be the beginning signs of this skin condition. "Cradle cap" may be the ONLY sign, too. Other times you can see a reddened, bumpy, scaly, almost greasy rash, involving the face, neck, ear (often behind it on the outside), armpit, and diaper regions. It can just be in a specific area or spread to involve the entire body. The rash is usually not itchy and doesn't make the baby uncomfortable.
Seborrheic dermatitis can go away on its own over a few months. Using a mild shampoo while brushing out the scales, or a little stronger "medicated" shampoo (selenium sulfide) to control the scalp lesions is recommended. The response is often good, although it doesn't just rapidly go away. Sometimes more frequent use of the shampoo is necessary. Occasionally topical creams--for example, steroids--are indicated. Your baby's doctor can confirm this rash and how to treat it.