This article is from the Model Trains FAQ, by Christopher D Coleman with numerous contributions by others.
For oil 3in1 MOTOR (not regular) oil is sufficient, but light machine
oil for electric motors is best. For grease, light lithium grease in a
small tube is good. The rule of thumb is to oil bearings and grease
gears. Never use more than one or two drops of oil or a thin coating
of grease. Excess will simply accumulate or fall on the track,
collecting dirt and making electrical contact worse. Never lubricate
needlepoint bearings or solenoid interiors. These are designed not to
be lubricated and it would just gunk them up. Lubrication of older
truck bearings is usually not needed except under extreme operating
conditions. One small drop on either side of rollers periodically is a
good idea. For the loco interiors see the next section.
 
Continue to: