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P + (1/2)mv^2 + mgh = constant.

So obviously (1/2)mv^2 is the kinetic energy, and pgh is the potential energy.

1.) Is this equation basically a statement of conservation of energy?

2.) If yes, then how exactly is pressure, 'energy'? I understand that a force acting over a distance is energy (work), and that pressure is force acting over an area, but in the case of a fluid in a pipe, where exactly is the distance that the force acts over?

3.) Also why does the equation only work when the flow is incrompressible (constant density), steady, and the thing thats got me most is non-viscous? I understand that from boundary layer effects, you can get a velocity gradient across the pipe (laminar flow), but why should this effect Bernoulli's equation?

I would really appreciate any help you guys can give. Thanks alot