I suspect search engines ignore the nofollow tag in time as they figure out a site is worthy anyway.
(reaches for Acme Military Grade Flame Thrower) :)
JS_Harris, I am a fan of your posts, you post some great advice. ;) But I think with this issue we may have a difference of opinion. It's important to stress that what follows is opinion and not fact, because I only have indirect evidence as a basis for my opinion.
I understand there is a school of thought that believes nofollows carry value. From my experience in researching blogs and non-blog websites that use this as their link building technique, I have not seen evidence that it has resulted in an increase in ranking. The amount of traffic these bloggers have quoted me is pitifully low and I have never seen these bloggers/webmasters rank for anything significant in the niches they are competing in.