Is cooking with olive oil bad or toxic

I think this is a problem with all oils. When something burns, it produces smoke. Smoke is generally indicative of something that isn't particularly good for us if inhaled. Same holds for oils. It seems that all oils will begin to produce toxins once they hit their smoke point. However, before that, they are completely fine. So pick an oil that will handle the temperature you're using by checking the smoke point.

There's also a difference between producing toxins and toxic. Does burning oil produce toxins? Yes. Will that actually make you sick? I don't know. But my inclination is that it's unlikely to cause you harm under "normal" usage or else we'd be hearing about people actually getting sick from burning their oil rather than just getting scare stories on the news about free radicals.

And to get very sciency (stop reading immediately if your eyes glaze over, I think that's a sign of toxicity), from biology online:

Researchers investigated processes of oxidative degradation - notably that caused at 70°C with ventilation - of a broad group of oils with very wide-ranging compositions. Another degradation process studied was that which is caused by microwave action that does not heat greater than a temperature of 190°C.

In both processes deterioration of the oils takes place. In the first type of process (70°C with ventilation) hydroperoxides are first produced and subsequently aldehydes. In the second kind of process (microwave) it is basically aldehydes produced. It has to be pointed out that both the oxidative conditions and the composition of the oil determined the velocity of the degradation and both the nature and concentration of the compounds produced.

These studies have shown, for the first time, that degradation of lipids in foods can produce toxic oxygenated aldehydes. These compounds, well-known in medical studies for their geno- and cytotoxic activity, considered as markers of oxidative stress in cells as well as being causal agents of degenerative illnesses, had not previously been detected in foodstuffs.

Researchers have shown that some oils produce these toxic substances in greater quantities and at a greater rate. Virgin olive oil was, amongst all the oils studied, that which took longer to produce this type of compounds and produced a lower concentration of them.