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I am wondering why adding No Follow on individual links is a problem? Or is my friend wrong?
Thank you.
Nofollow is not about stopping files being searched, indexed or anything like that.
It's about trusted links versus 'not sure':
The original use was for blogs, guestbooks etc., where guests could drop links that you - the webmaster - would then be responsible for. As Google (and others) recognised that being responsible for every 'recommendation' added to a blog was unreasonable, nofollow was designed to take such links out of the equation. It still works, but would not be counted for or against the host site.
Neither would it guarantee not to be followed, though recent noises from the SEs say it might not be. To stop a page being indexed, use noindex; to stop it being spidered, use robots.txt
The use of nofollow has widened recently, with Google's full frontal attack on paidlinks; on any site, at any time, use nofollow for paidlinks or any link you are 'unsure of' (though deletion is better!).