|Since you all are speculating that Google doesn't mean what it says, it seems a bit fruitless for me to post here, but anyway ... :-) |
The information on [support.google.com...] is still valid. Using the rel=nofollow microformat prevents PageRank from passing. It's useful for potentially untrusted links (eg in UGC), it's useful for advertising, and to some extent, for crawl prioritization. There are some good examples listed in this thread - such as event sponsors, etc.. They aren't taken into account when we review sites with regard to paid links or other link schemes, nor are they used for things like authorship. We generally still show them in Webmaster Tools though, since these links may be bringing users to your site. If you're seeing issues with your site with regards to paid links, link schemes, or similarly, then apart from just removing those links (if they're just embarrassing), you could add the rel=nofollow instead, especially if you feel that these links have been useful in driving users to your site.
Does that help? Anything missing?