You're wrong Jimmy. The pistons don't move more freely when hot, the oil is chosen to be at the right viscosity when the engine is running i.e. when hot. It's hot because of friction, but mainly because of the controlled explosions going on inside. The oil cooling parts of a car engine is there because water would boil rather swiftly, the areas of the car which can be cooled by water, are.
The oil filled computer doesn't make much sense. The only approach to keep hot computers cold with oil is combining it with conventional water cooling, with the radiators (and probably pump) outside the oil. The oil then does a very good job of cooling the motherboard, and can probably deal with the psu. However air does a sufficient job of cooling the motherboard and psu anyway, so there isn't any gain to using the oil. I suppose instead you could immerse it all in oil, run a load of copper pipes through the oil and pump water through the pipes, so using a crude heat exchanger to keep it cool.
If you do try this,
1/don't put hard drives under oil
2/oil will wick along cables, so have the I/O panel at the top, such that your monitor cables aren't exposed to oil
3/fans work fine under oil, they just spin slower
4/mineral oil is a horse laxative, so get it from a vet
Finally, there is potential for peltiers/phase + oil filled computers, basically using the oil to avoid condensation issues. Motherboard in a sealed box, filled with oil, with a couple of tubes and a few cables going in the lid. I've got peltiers on the brain at the moment though.