As you’ve probably read elsewhere, most of the speed comes from the reduction of friction, which is all where the wheels rub against the axles. Do reduce this, you want to spend lots of time polishing them. Here’s what I found can be done to get a mirror-like finish.
Ideally use a drill press (like shown in my previous post) to hold your axle nail. If you don’t have a drill press, a corded or cordless drill in a mount or vise of some sort will also work (make sure it’s secure though).
Optionally mill away the middle section where the wheel would touch, leaving only the inner- and outermost areas. This reduces the surface area the wheel will touch the axle. I did this with a file mounted in a vise on my drill press.
Use a file and grind away any burrs that are around the nail head. Also bevel the inside of the nail head if allowed. For grinding I use a set of jewelry files.
Start with a coarse sand paper and work your way down to finer grits. I used 400, 800, and 1200-grit. Cut strips of sandpaper about 1/4″ x 3″. While the axle is rotating at medium-high speed, pull the sand paper back and forth over the axle. Do this over the areas where the wheel will touch the axle, including the inside of the nail head. It might help to have a small piece of wood to push the sandpaper against the nail head.
1200-grit produces a pretty reasonable result, but you won’t quite achieve a final mirror finish yet. To get to the final finish, I decided to use compressed graphite sticks. Again while the nail is spinning, press hard (but not too hard to bend the nail) with the graphite stick to polish and lubricate. Parts of the graphite stick will break off, and this is OK. After a few minutes of this you should have a very shiny and pre-lubricated surface for your wheel to run on.
As you can see, there are still some minor scratches on the polished part. Next time I might add an additional higher-grit polish before the graphite.
Of course you will want to add additional graphite powder to your assembled wheel, but with a polished axle you will have greatly reduced the friction produced.