Tom,
I should have added that any lubricant used should be plastic compatible.
Atlas, Bachmann, LaBelle's, Lionel all have plastic compatible lubricants available for your trains.
A light oil will be required to lubricate moving parts. A gear grease can be used on the gears.
an electric conductive lubricant can be applied to the pickup rollers.

Many folks have had good results using Mobile 1 Synthetic oil & grease,
I haven't tried them myself so I can't verify the results.

Make sure you clean the wheels and pickup rollers, if they're dirty it will effect the running of your train.

Yes, Lionel did suggest the use of 3 in 1 oil and motor oil for lubricants back in the day and many folks still use them on the pre and post war Lionel trains, but for cautions sake, I suggest using modern lubricants.

Dave

Addition:

I should have included this link on "How to Operate Lionel Trains & Accessories:

http://www.slsprr.net/history/1954LionelTrainsAccess.pdf