Did Newton know or assume that planetary (extraterrestrial) space was frictionless vacuum-space? For a correct calculus of the perpetual orbital motion of planets as determined by Newton’s laws of gravitation, frictionless motion through interplanetary vacuum space would have been a prerequisite. Did Newton ever explain if and why he ignored friction?  Like in many other cases, correct intuition presumably guided Newton. 
 A: Newton actually considered both cases. It had been theorised by Descartes and later Huygens that space was filled with a viscous fluid, and gravity would be caused by vortices in this fluid. 
Assuming Descartes' theory, he proved that the ratio of the periods of revolution of two planets was equal to the square of the ratio of their distances to the sun (Principia, Book 2, Proposition 52). But from Kepler's law, which had been obtained by Kepler from Tycho Brahe's experimental data, we know that the correct exponent is actually 3/2. Therefore Descartes' theory was to be rejected. 
Moreover, in Book 3, Newton proposed that planets feel an effective 1/r^2 force, which gives the correct Kepler's law. He did not explain where this force comes from and in principle it could originate from the interaction of many phenomena, including the non-emptiness of space. However he refused to speculate as to what causes the force law (hypotheses non fingo). Anyways he did not consider the possibility of inverse square law plus non emptiness of space, as it was an unnecessary hypothesis. So at least in this sense he assumed the space is empty.
A: A large part of the extraterrestrial or planetary space is considered to be vacuum. Since gases and particles are present in very minute quantities in planetary space, it is obvious that there would surely exist some amount of friction during motion through space. However, this friction is very negligible and it would be a very time consuming as well as a very tedious job to calculate this friction. This could probably be the reason why Newton did not consider the friction resulting through the motion in space.
A: As far as I know, Newton's work on celestial mechanics was heavily based on research done by Johannes Kepler who himeself analyzed measurements of planet movements done by Tycho Brahe in Denmark. 
Kepler was able to describe the planet trajectories as ellipses (based on the very precise measurements by Tycho Brahe). In Kepplers laws, no effects of friction where added because the measurements didn't showed any evidence for such a phenomena (e.g. planets slowing down or changing their 'perfect' trajectories)
Therefore, I do not see any reason why Newton should have discussed such an effect for objects following so 'perfectly' the laws of mechanic in first place. 
But I'm not an expert on the original work of Newton himself. Therefore, I cannot give you more information if Newton did any research on friction in mechanical systems on earth based or celestial scenarios. 
