Cool Whip is a brand of imitation whipped cream hardly containing any milk product other than caseinate, so it's not real whipped cream. However, the reason why it sells a lot better in the United States than any brand of whipped cream is it has a more solid, frigid taste allowing it to taste partially like ice cream.
In "Old Wounds", Woody and Malloy were forced to spend a few nights at Firecracker Jim's place, and Jim demanded that they "get the Cool Whip" because "shit's about to get weird between him and Buella". At the end, Jim accused Woody of having "left the top off the Cool Whip", leaving it inedible and all dried up. Jim got very angry over this, then he got out a grenade and pulled the pin out in an attempt to kill Woody, which failed after he used Steve as cover.