Readers of this blog will know we went through this one when Google announced they had changed the way they viewed the ‘nofollow’ tag.
You can read these posts here:
Also, here is a new video from Matt on this subject.
There are many (many…) sites on the web that still have a ‘nofollow’ based PageRank sculpting architecture. There is an element of ‘not broke, don’t fix’ about this, but it is worth bearing in mind that if you have this environment you are burning a great deal of PageRank that you could be channelling more wisely.