It's Santolina rosmarinifolia, the olive herb. It really smells and has the flavour of olives.
I made foccacia last week and used this chopped up on top before I baked it. I chopped it up with parsley and basil mint and put it in the pasta sauce on Tuesday.
It would probably be awesome in a salad dressing too, used to flavour meats or sprinkled atop a pizza. Saves the fussy kids screwing their noses up and picking off the black bits of olive, what they can't see won't hurt them.
It is a welcome and useful new herb in my garden. In late Summer it comes out with small yellow button flowers, and grows up to 50 cm high.