Matt just did a huge post with updates to Google’s SEO documentation, and mentioned a new page about nofollow. This page features one block of content that is the final word on whether using nofollow for PageRank sculpting is “allowed” or not:
Crawl prioritization: Search engine robots can’t sign in or register as a member on your forum, so there’s no reason to invite Googlebot to follow “register here” or “sign in” links. Using nofollow on these links enables Googlebot to crawl other pages you’d prefer to see in Google’s index. However, a solid information architecture â€” intuitive navigation, user- and search-engine-friendly URLs, and so on â€” is likely to be a far more productive use of resources than focusing on crawl prioritization via nofollowed links
Now I’ve always said the same about good site architecture etc. But Google basically tells us here that it’s ok to use nofollow for PageRank sculpting. Now I saw from the notes of the Bot Herding session at SMX Advanced yesterday that Adam Audette complained that PR sculpting was aimed way too much at Google. Well, Adam, I know you people don’t, but we live in a Google world here in western Europe, where Google has a 95% share of all searches.
So: use nofollow, use it wisely, it’s one of the authorized tools in our arsenal as SEO’s.