tedster - 10:50 pm on Jun 3, 2011 (gmt 0)
I've run into a bunch of smallish regional news sites that sell both text and banner ads without any nofollow. In fact, I don't think they even know about it!
Google seems to ignore them in ranking as well as not penalizing for the practice. In other words, Google just applies their own "internal nofollow" even though its not there in the code. I wouldn't absolutely depend on this effect, but I do see it happening. In fact, when the rel="nofollow" was first announced, Google did say they already used this approach internally and were now making it available to webmasters.