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What is an Olive?
Olive is also the codename name given to JUNOS software running on an PC rather than a Juniper router. A common misconception is that Olive is some sort of "special software", but it is actually ordinary JUNOS software running on a PC of similar specifications to a Routing Engine, with no forwarding hardware (or PFE) attached. If you took a Routing Engine out of a Juniper router and booted it in a blade server chassis, it would effectively be an Olive.
Juniper originally developed Olive functionality as a software development platform, before its hardware product was fully implemented. It is not intended as a "router simulator", and has never been a supported product, or intended for use by the general public in any way. At one point it was used by Juniper internally for lab work, but has largely been phased out of this role with the availability of low-end hardware based platforms such as the M5.
The most common use of the Olive platform is for creative and unix-competent hackers to learn the JUNOS CLI on a low-cost platform. It is capable of forwarding a small amount of traffic, but does not support many of the features found on real Juniper routers. Essentially the forwarding on an Olive is the same as routing traffic via your fxp0 or em0 management interface on a real Routing Engine.

Ok so why all the secrecy?
Juniper's official position is that Olive does not exist. Considering that Olive is an unsupported and unsupportable platform using "free" (aka illegally licensed) software, this is not an unreasonable official position. Olive is essentially a hackers platform, with absolutely no support of any kind, and it is not suitable for any type of commercial use. If you are in any doubt, or if you are not able to figure it out, you should invest in a low-cost platform such as J-Series instead.
It is also important to remember that Olive exists because Juniper allows it to exist, and is a testament to the mutual respect between the extremely knowledgeable developer and user bases. If the Olive platform became widely abused, Juniper could easily add additional software checks to prevent it from working. Please do not abuse this feature by doing stupid things like contacting JTAC for support on an Olive, or selling illegal copies of the software as "router simulators". This type of activity is likely to have serious legal consequences and/or provoke a justified response from Juniper, so just don't do it.