I honestly wanted to avoid this topic, but due to the amount of attention on this topic right now, it is our duty to let the non-forum activists know about the controversy.
Shari Thurow authored an article on Search Engine Land named You'd Be Wise To "NoFollow" This Dubious SEO Advice. In short, Shari said worry more about your site architecture then using the nofollow attribute to funnel your PageRank, sculpt your PageRank, or silo your site for search engines. Shari is of the opinion that a quality site does not have to worry about it, while others, including Stephan Spencer's Search Engine Land article named Sculpting Your PageRank For Maximum SEO Impact says it works.
Michael Gray's Why There’s Nothing Wrong With Sculpting Your Pagerank takes issue with picking on those who do sculpt PageRank. He says there is nothing wrong with it at a macro level. It all depends in my opinion.
At SMX West a buddy showed me his site and asked me what more he can do. This site was absolutely optimized to the T. Pages that didn't have much content were nofollowed via the link and noindexed on the page level. The detail he put into his site was truly amazing. It all depends on priorities and resources. I say, if you got the time, why not sculpt. Google is not handing out penalties to those who use the nofollow and in the Linking Q&A panel, Matt Cutts was asked:
Q: PageRank sculpting/siloing: should we do that? Matt: In general, worry more about the high quality of your site. After you've taken care of it, then think about sculpting. Put your best pages on top - your best selling products should be linked from your homepage. The nofollow and metatags essentially do the same kind of thing. Google is against abusive manipulation.
So why not, if you have exhausted everything else you could have done on your site.
In any event, the discussion is incredibly heated at Sphinn, so enjoy.