Lubrication is indeed important, but the one thing that absolutely MUST happen is to fill the spiral clearance between the crests of one thread, and the root of the other. It's also important to read the manufacturer's instructions for service limitations, and even pipe size. There are a variety of thicknesses of Teflon tape. The thin white stuff to the much heavier orange colour. The heavy stuff is difficult to apply to pipe under 1/2". I've never had much problem with properly applied tape, even on 150 & 300# steam systems. Having said that, there are those "special" individuals who'll fail to start wrapping one or two threads back. However, these are typically the same morons that load-on pipe dope, including female threads, so that now instead of strings of tape inside the pipe, there are blobs of dope.
X-Pando is an awesome thread sealant, but it does have a couple of drawbacks. It makes it difficult (frequently VERY difficult) to disassemble, and it takes at least overnight to set. The time thing usually means it's unsuitable for many maintenance jobs, as production people want this thing back in service 15 minutes ago.