In a large skillet cook sausage, onion, and garlic over medium-high heat until meat is brown, using a wooden spoon to break up meat as it cooks. Drain off fat.
Transfer sausage mixture to a 3-1/2- or 4-quart slow cooker. Stir in spaghetti sauce, mushrooms, pepperoni, and basil.
Cover and cook on low-heat setting for 3 hours. If desired, stir in olives and/or sweet pepper; cover and cook on low-heat setting for 15 minutes more. Serve fondue with dippers, swirling pieces as you dip.