The hub generator does not have a friction drive, so it does not use friction. It also does not cause extra friction as it rides on the same bearings the wheel needs anyway. Of course it induces some drag when you take power from it (and probably a tiny amount of eddy current losses just when it is turning. But that is really negligible. The drag when you take power is just the converted power which any type of generator will cause. Your magnets also.

So far, this is at the idea phase, but based on my earlier experiements in making wind-turbines using the same technology and mechanical arrangements, My wind generator can produce 500+ watts in a moderate breeze. But the research is not online- yet. I'm busy with patents for the special design of the generator.

do you want thisone https://www.youtube.com/watch?v=2JsNxOX34cE  ?

This is a generator with a very large (and variable) air gap. That makes it inefficient in the way of needing many very high power magnets. The air gap also has to be large because the wheel can wobble. So also this works somehow (flickering LEDs) it is far from being a good electrical generator.

Having all this magnets exposed to the elements and possible obstacles or debris is also a bad think. If the nickel coating is damaged the magnets corrode really fast to grey powder.

The effort required is less than the traditional generator on the tire type. But still takes power away...and I have to eat another mars bar to make up for it.

I know of the hub generators. but they still use friction to generate the power. 

What do you mean by "friction"?

My dad had the hub generator on his Raleigh bicycle, like this one:http://minisystem.blogspot.com/2011/09/ode-to-raleigh-superbe-and-its-dynohub.html  I look forward to your add-on innovation. 

I really like the idea behind this one. Should be an interesting entry for the Power Harvesting challenge too!

Can't wait to see what you come up with!