I dont see how friction would be a problem here. Of course, I havn't spent ANY time studying perpetual motion devices, so this is just my speculation.

Friction would be generated when the center magnet spins. But the other magnets on the outside ring will keep on pushing it, and if there isn't a lot of friction, the device should work until the magnets demagnatize.

Lets use a jenga block for example. Put one down on a carpet floor. Weigh it down a bit to so it weighs as much as a small magnet. Now carpeting can cause a lot of friction. Chances are, just by blowing at it, it wont move anywhere. Now, apply enough air pressure, from lets say a high pressure co2 hose, and i guarentee you that the jenga block will start rotating or moving.