Well i have started to use No follow tags on my site, however not to excess..
My index page contains duplicate links to the same pages as well as some pages that really hold no value such as an advertising portal page and so on. By placing no follow tags on the duplicate links as well any other links that can be followed from other pages such as my links page I have noticed a huge bump in my SE rankings
So what i have basically done is intead of having around 50 navigation links, i added no follow tags to the ones that can be indexed through other internal pages thus lowering the number of links so around 10 on my index page..
For example rather that having my Links page allow
PR flow from my index page i added no follow but it still can be spiderd as there is a link to my sitemap that has a link to the links page which will still allow it to spider and pass
PR..
I do agree that people that add no follow to all links can hurt there site but by using certain tactics to control how and where the
PR flow goes can benifit ur site.. it has for me anyway