That fact that friction is incompatible with potential energy does not mean that it is not an important consideration. In fact, no real system is completely frictionless, although we will usually treat systems as if they were. The friction in this case is a force in the opposite direction of your movement which keeps you from slipping.
Friction often presents itself as drag, when an object is moving through a fluid medium.
Consider an object slowly sinking in a swimming pool. Opposing gravity, however, is the buoyant force of the water, which attempts to raise the object. Thus m v gives the volume of the object, and r g gives the gravitational force per unit volume of the fluid. Since g is negative, the minus sign indicates that the buoyant force is directed upwards. This is helpful because gravity is not the only external force which we might want to consider.