Is anyone using a meta robots tag with their paginated pages? None of mine are in the non-supplemental index, nor would I want them to be, but they must be diluting PR that could be sent elsewhere. I wonder if they are generating "internal PR" that I wouldn't want to miss out on though?
I think saying people "should be" using nofollow is a bit strong. More like people can use it for internal links if they're power-user-y enough to want to sculpt PageRank flow within their site at the link level. But I'd say that most regular webmasters don't need to worry about link-level PageRank flow within their site. I think saying "power users and webmasters should be employing on their sites" overstates it a little. It's available if you want to get into that much fine-grained control.