Suitable oil for woking?

You want to use an oil that will handle the hotter temperatures of a wok. This list of oil smoke points suggests that most refined oils will work fine. Don't use unrefined oils or butter because they'll burn.

Once you've got an oil that will handle the heat, you want something that will taste good. I think that's the main issue with olive oil. There aren't olives in asian cuisine and I think that would taste a bit funny. I tend to use vegetable or canola oil for the majority of my stir-frying and then add a little sesame oil towards the end (generally when sauteing garlic and ginger). The sesame oil adds a strong asian flavor to the food. I've tried just using sesame oil, as a recipe sometimes recomends, but I find the flavor overpowering. Unrefined sesame oil is fairly common at the grocery store, and you don't want to use that as it will burn in the wok (but it could be drizzled on the food after cooking).

You need an oil with a high smoke point, because the wok will be on high heat.

The most commonly-used is probably peanut oil. Grape seed oil, canola oil, corn oil, and also sunflower oil are also common.

Olive oil is actually fine to use too, just not the "virgin" types which have significantly lower smoke points. But I still wouldn't use it because it will impart an olive flavour that's really not appropriate for most Asian cooking.

Please refer to this oil smoke points table for a more complete reference. You'll want a smoke point that's well over 400° F (204° C); 420° F (216° C) should be okay, 450° F (232° C) is ideal.

The best oil for the wok is rice oil (because of its high smoke point, 490°F, 254°C). Peanut oil is not bad either and more commonly used. It is not healthy to heat any oil too far, so it's best to add the oil very shortly before adding products to the wok so the products can cool the oil during the stir frying.

The wok needs to be very hot to prevent sticking and create a proper stir frying effect, so it's not a good idea to leave the oil in there to smoke. The oil should be kept a lot cooler than the wok surface.

If you add products with sufficient water content in a fast enough rate you can even stir fry with virgin olive oil or sesame oil, but it takes some practice and speed. It's easier and safer to work with rice oil and add some flavored oil later in the process when the temperature is lowered.

My favorite is Spectrum Organics High Heat Safflower Oil - it is organic, and good up to 450 F. Peanut is great too, but I can't use it in my house due to allergies.