Nikwax Leather Tretament
Anyway, baby oil? What a jerk. First of all, you're right: It's seriously apt to interfere with the Gore-Tex liner's ability to breathe, maybe even turning it into waterproof/non-breathable material. Even worse, in my view, is that it screws up the tanning in the leather (assuming these are mostly or all-leather boots). Baby oil is a pretty light lubricant (it's mineral oil with some fragrance added) but will still over-soften the leather, much like mink oil would do. So you might find that the leather has turned to something akin to mush.
Anyway, I'm not overly optimistic that this problem can be corrected. If these were my boots, I'd start by soaking them in a bucket with a solution of warm water and Dawn detergent. Dawn is fairly mild and is an excellent surfactant (grease cutter). Soak the boots, scrub them with a soft-bristled brush, air dry, then treat the leather with a real leather conditioner such as Nikwax ($8; www.rei.com). Then take the boots for a hike. You'll know immediately if there are problems. They may well feel too "soft," and your feet are apt to be sweatier than normal. If either problem manifests itself, chuck the boots, buy new ones, and send your friend the bill.
Pick up a copy of the 2006 Outside Buyer's Guide, on newsstands April 25, for a look at 396 torture-tested products, including the 2006 Gear of the Year award winners and an all-new women-specific review section.