Looks like a seriously leaking head gasket! If the head gasket were blown, then the car would run really rough (or not at all). If it still runs fairly smooth then the gasket is probably just leaking. When water from the cooling system mixes with oil, it creates the dreaded "chocolate milkshake" in the crankcase. Not good. The problem is that this oil/coolant mixture is not as good as straight oil at maintaining the thin film between the crankshaft and main bearings that keep the bearings from disintegrating. That thing will be knocking before you know it, and will more than likely just seize up one day...soon. If you change the head gasket, then you can save the motor...if not then it is as good as dead. If it were not a Toyota, then chances are it would not even be running. Keep the oil as clean (water-free) as possible and CHANGE THE HEAD GASKET!

Good luck. Regards, Aaron