For fayalite formation times of several thousand years, and systems enriched in water by a factor of ten relative to solar composition, 1 μm radius olivine grains could reach 2 mole% fayalite and 0.1 μm grains 5 mole% by nebular condensation, well short of the values appropriate for precursors of most chondrules and the values found in the matrices of unequilibrated ordinary chondrites. Even 10 μm olivine crystals could reach 30 mole% fayalite above 1100 K in solar gas if condensation of metallic nickel-iron were delayed sufficiently by supersaturation. Consideration of the surface tensions of several phases with equilibrium condensation temperatures above that of metallic iron shows that, even if they were supersaturated, they would still nucleate homogeneously above the equilibrium condensation temperature of metallic iron. This phenomenon would have provided nuclei for heterogeneous nucleation of metallic nickel-iron, thus preventing the latter from supersaturating significantly and preventing olivine from becoming fayalitic. Unless a way is found to make nebular regions far more oxidizing than in existing models, it is unlikely that chondrule precursors or the matrix olivine grains of unequilibrated ordinary chondrites obtained their fayalite contents by condensation processes. Perhaps stabilization of FeO occurred after condensation of water ice and accretion of icy planetesimals, during heating of the planetesimals and/or in hot, dense, water-rich vapor plumes generated by impacts on them. This would imply that FeO is a relatively young feature of nebular materials.