Oil does more than reduce friction. It lubricates, cools (a large share of an air-cooled engine's heat leaves through the oil), cleans (carrying dirt and metal to the filter), seals the gap between rings and cylinder walls, cushions bearings and protects against corrosion.
Wet and dry sump
In a wet sump engine, like most horizontally opposed ones, the oil lives in a sump under the crankcase. A dry sump engine keeps it in a separate tank; a scavenge pump returns oil from the engine to the tank. Radials and turbines use dry sumps.
Pressure pump: a gear pump pushing oil through the engine.
Pressure relief valve: sets the oil pressure.
Oil cooler, with a thermostatic valve (often called a vernatherm) that lets cold oil bypass it until it warms up.
Filter, with a bypass valve that opens if the filter clogs, so the engine isn't starved of oil.
Oil
Aviation oil grades are about twice the SAE number: grade 100 is about SAE 50, grade 80 about SAE 40. New or overhauled piston engines are usually broken in on straight mineral oil, then switched to ashless dispersant (AD) oil, which keeps dirt suspended so it drains out rather than forming sludge. Follow the engine manufacturer's approved list.
Turbine engines use synthetic oils with their own specifications. Never mix them with piston oils, and follow the manual on mixing brands. Turbines carry chip detectors: magnetic plugs that catch steel particles, some wired to a light in the cockpit. Metal on a chip detector or in a filter, and wear metals rising in oil analysis, are early warnings of a failing bearing or gear.
Practice
Which of these is not a job of engine oil?
More info
Quick reference
Oil's jobs
Lubricate, cool, clean, seal, cushion, protect.
Wet / dry sump
Oil under the crankcase / in a separate tank with a scavenge pump.