If its mostly city, I go 3000-4000 miles. If it is mostly highway I will go 5000-6000 miles. the oil comes out nasty and I would rather not have it in the engine beyond that. I am about due now that I think about it.
The OLI is based on calculations made by the computer as to what the condition of the oil should be. The actual oil itself does not really break down, but the additives do and the oil gets dirty. I find that my OLI averages about 10,000 miles before it gets down to 5%.
It takes into account engine temperature, rpm, runtime, load, and I'm sure other parameters. Nearly every manufacturer is using some sort of oil life monitor now (all with varying degrees of frustration to reset them), and none seem to be consistant. It does not actually "test" the condition of the oil, just goes off of a computer program, so the car does not "know" that there is clean oil in it.
They know the consumption rate of a common oil additive under those various conditions. The computer calculated the oil life is based on how much of that additive is left. It is likely also working on the assumption that the cheapest oil, with the minimal amount of additive, is in there.
Some other manufacturers do just use a trip odometer.