How does lubricants affect friction?

Answer 1

The purpose of lubrication is to reduce friction. Microscopically two surfaces in contact look like huge mountains trying to slide over each other, a very tough task. A lubricant fills in the gaps, and in effect smooths the surfaces.

Similarly, a lubricant on a microscopic level is like liquid ball bearings that facilitate the surfaces 'rolling' over one another, further reducing friction.

Many factors go into making a lubricant "Good". Its resistance to heat and pressure, its viscosity, corrosive affects, etc.