Q: How do you use nofollow on your own internal links on your personal website?
A: I pretty much let PageRank flow freely throughout my site, and I’d recommend that you do the same. I don’t add nofollow on my category or my archive pages. The only place I deliberately add a nofollow is on the link to my feed, because it’s not super-helpful to have RSS/Atom feeds in web search results. Even that’s not strictly necessary, because Google and other search engines do a good job of distinguishing feeds from regular web pages.

[*] Nofollow links definitely don’t pass PageRank. Over the years, I’ve seen a few corner cases where a nofollow link did pass anchortext, normally due to bugs in indexing that we then fixed. The essential thing you need to know is that nofollow links don’t help sites rank higher in Google’s search results. – From mattcutts.com

What this means to you as a webmaster is that if you have a site, especially a blog, and you’ve been adding the “no-follow” attrib to certain links, including blog comments, Google will now be passing equal pagerank to all links, and those that are no-follow will still have no page-rank, but Google will be dividing up the page-rank equally to all links. This means that the page-rank of no-follow links goes “poof!” It disappears and that PR is now wasted. As far as we know, Google is implementing this now. Keep this in mind folks.

~Stephen