Bike shorts padding was originally chamois deerskin from a little french mountain deer. The idea is for the padding to stick to your vitals so that any friction or abrasion casued by movement between you and saddle is absorbed by the chamois. Riders used all kinds of creams and potions to help the chamois work better.
Modern shorts all use synthetic padding which doesnt require any lotions or potions and handles sweat much better. It is used next to the skin (just ask UnderwearNazi).
I only used padded shorts on rides over 1 hr.