1script - 1:25 am on Feb 18, 2013 (gmt 0)

Thanks, indyank. As far as subpages (?) - the category listings are paginated - is this what you meant? - and there is a navigational bar to page 1, 2, 3 ... etc. but as far as structure, the last level down from the category listing pages are the content pages themselves.

I guess you are right, I am a bit confused about PR flow here - seems like if the page is not even in the index, no PR can flow through a page that does not exist. I was under impression that the "follow" attribute (as in lack of "nofollow") refers to discovery of links, not passing PR to them.

I do see one disadvantage in having the noindexed URLs in sitemap - seems like you would not want to waste your crawl budget on URLs you don't want indexed anyhow. My guess is, however, that the sitemap is not quite what Google uses for discovery of new URLs and if there's a link to it somewhere, it follows the link and has to read and process the URL just to see the noindex meta in its code, so it all may just be moot point.
I am personally leaning towards removing the noindexed URLs from the sitemap at least to see how much of the ones that I actually want indexed are actually indexed (as reported in WMT)