In short, Matt says do not use it for internal links - never.
But do you agree? Some webmasters do and some don't. Here is one SEO on Twitter that said no:
But in a WebmasterWorldthread, Tedster said it does work and shared a story. He said:
Last year I was asked to look at a site that had major ranking troubles. They had used nofollow extensively, trying to sculpt PageRank to go only to those pages they wanted to see in search results. Even some main menu items had nofollow!
At the time they were below 10% of total traffic from search. I suggested they remove all of the nofollows and they did. One month later they were up to about 30% traffic from search. I haven't checked in with them lately, but I'd guess they continued to improve - unless they got tricky again.
Do you use it at all? Take my poll below:
Forum discussion at WebmasterWorld.