John
if the wheels are binding, then lubrication won't help any.
first thing to try would be to take out the wheel sets and make sure that the journals are clear of any "junk" that might've been left in there from the molding process. You should also make sure that the wheels are in guage (and that the axles aren't too long)
-Dan
Builder of Bowser steam! Railimages Site
And the second thing to do is to check the tension of the axle wipers. Most N scale steam still relies on center wipers made of brass or phosphor bronze to pick up power from the wheels and transfer it to the motor. While this method works well enough in the larger scales, it really doesn't in N, where the light weight of the engines can't overcome the drag of the wipers. So wheels don't turn on a lot of N scale tenders (only Kato has gotten this right, by adding wipers in the journals, thus eliminating the drag).
So loosen up the wipers and the problem might just go away. Just don't loosen them too much, or they won't pick up power at all!
Ray Breyer
Modeling the NKP's Peoria Division, circa 1943
To answer the question about lubrication, if you decide to try that as a last resort, use powdered graphite, but very sparingly. Powdered graphite may also help the pickup wipers roll more freely against the axles. If you don't have any powdered graphite, use the lead from a #2 pencil. Rub the ends of the axles on the pencil point and enough graphite will be transferred to them to do the job. Also rub the lead against the axles where the wipers make contact. That will transfer enough graphite to serve as a lubricant, and the graphite will not attract dirt like a liquid oil would. Graphite conducts electricity, so electrical pickup should also improve. If you remove the axles to do this, make sure you don't get any of them turned around or you're going to create an electrical short.
Thanks for the help guys. I will work on it this weekend. These are great suggestions, its been a while since I have had to dig in and solve a loco problem.