I know adding rel="nofollow" to links prevents Google from following that link and prevents leaking of link juice, but I had a few questions on how far this goes with other elements.
I've searched and found [webmasterworld.com...] but this is old (from 2003) and wanted some clarification.
1 - Do external images leak link juice? The link above says people hotlinking to a hosted image of yours can boost your PR, so does that mean having external images on your site can leak link juice?
2 - Do external iframes leak link juice? If I were to include an iframe on one of my domains that is hosted on another, would this leak link juice to that domain? For example, abcde.com has an iframe of a fghij.net page.
Not really. If you have ten links on a page and one of those links is nofollowed, afaik, the rest of the links will pass PR as if all ten links were passing links. I don't mean to oversimplify, but adding the nofollow won't make it 1/9th of the total PR flowing. It's still 1/10th.
I don't worry about PR leaks, especially for things like hotlinking to images. I don't care about the thousands of hotlinked pages on my sites. I don't nofollow them. I don't nofollow anything. What matters is that the site ranks exceptionally well and that traffic and earnings are consistently rising year over year.
I would worry more about pages that are dead ends, like PDF files that don't link back to the home page, especially if the site has many dead end pages. If that's not an issue then my focus goes back to more content and more links.