to add on to the post, this is what i generally do on a regular basis:
elbow grease on hand tools
wd40 on low power low rpm tools... actually, i don't think i have any low power low rpm tools
but if you need to grease, say, a shaver, wd40'll do the trick
lithium grease (or wd40 if i can't immediately find lithium grease) on the more powerful stuff, like my dremel. can you say, "faster, quieter, cooler dremel?"
and on fans, i use motor oil.
i mainly grease stuff when it starts making noises it shouldn't or if there's more friction between joints/bearings.
as for oxidation, i use either metal polish on non-jointed tools or a combination of vinegar and salt (which makes low molarity hydrochloric acid) and that will take the rust right off the joints and stuff. remember to clean with 99% alcohol afterwards to prevent the water in the vinegar to rust your tools again. 70% should work, too, but i prefer 99%.