Forget if PageRank is used or any of that. Let's pretend PageRank is still a value that is meaningful. Google uses the nofollow attribute within links to combat link spam and enable webmasters to tell Google (Yahoo and MSN) that this link is not a trusted source of some kind. In the NYC SES Indexing Summit Google said that they do not follow any link with that attribute, it is like it is not there, Yahoo woulnd't give an answer on that.
So if Google won't follow it at all, it won't pass PageRank, or that is the assumption.
Forum discussion at HighRankings.