they are demoting internal navigational links/anchors somewhat?
Am not speaking for Ted, but my take on that is that Google is not just flowing pagerank in different rates to internal, but to external links as well. The idea is that some links are more likely to get clicked than others. Footer links less likely. Links in small text less likely. etc. Links more likely to get clicked are assigned more weight. Goes back to the original paper where the surfer gets bored and clicks out. Only in this version it resembles a horde of surfers and the links clicked are the averages in certain areas/phrases and possibly contexts that get clicked the most.
When was the last time I clicked a site map link outside of an SEO situation? Can't remember.