All the gears on an internal hub are usable, there's no overlap. These days the ubiquitous Shimano Nexus hubs can shift under load. For the kind of bicycle most people buy they are a reasonable alternative because there isn't a fragile derailer, there's no double shifting, and the adjustment is static alignment of two yellow marks.

In terms of friction, there are no jockey wheels and the chainline can be perfectly straight. Anyway, the internal friction of a geared hub is going to be unnoticeable for an average cyclist because the tires will be under-inflated, the chain covered in crud, and the brakes will be rubbing on untrue wheels.

But like everything it's a tradeoff.