Nofollow links are exactly what the name suggests, they are not being followed by Googlebot and they are not being taken into account when it comes to ranking websites... at least that's what they say.
It let inform the google bot not to follow the link. As a result no link juice and ranking advantage to the nofollow links.
You have been or at least registered with this forum for 2 months now and I am sure (provided you visit DP daily) that you have definitely read about do follow and no follow. This topic has been widely discussed and has been answered several times. I think members before me were kind enough to answer your question all over again.
If you want to link to your favourite blogs,etc and don't want to decrease your PR (because of linking to those blogs), you can use "Nofollow" attribute..sothat google don't follow it.
I used many no follows on a new site I was involved in about 5 months ago. I no followed every outgoing link I had to an external site (unless it was a pr5 or more) and I no followed any about us, privacy policy, shopping cart, etc on the page. It works wonders. Matt Cutts talked about "Pagerank Sculpting" a while back but I can't find it, but here is a good article: http://www.searchenginemarketing.co.uk/blog/sem/pagerank-sculpting/
A "no-follow" tags disables all links coming from outside to gain backlinks by linking to your website/blog.
there is no use of no follow if you get link with no follow the google will not get points for that links. so avoid it
rel="nofollow" is NO FOLLOW. It is telling Googlebot not to follow the URL. The site does not like your URL, for that matter, anybody's URL. It is suffering from a rare desease called Athazagoraphobia, or the fear of forgetting or loosing. It does not want his guest Google bot making friendship with your URL and abandon him. Cheers