Yes. Using the rel attribute in an anchor tag as below is simply an instruction to the spiders not to follow the link. It's especially handy to prevent comment spam in blogs. You can read more about nofollow at http://en.wikipedia.org/wiki/Nofollow
In SEO (Search Engine Optimization) point of view, putting nofollow attribute to a link can help avoiding linking to resources that you don't want Search Engine Spiders to crawl or linking to site that you don't want to give credit to (a link from a site to another site is count as a "vote" to determine the importance of a page)
Are you asking what the nofollow attrinute does to a link? If so, it simply tells google not to count a link to the site the link is to. Only google use it.
Like the other guys are saying, the sole purpose of adding the rel="nofollow" attribute to your links is to communicate with the major search engine's spiders. Originally developed by Google, the 'nofollow' attribute has been adopted by the other major search engines including Bing and Yahoo. Adding the attribute to a link, essentially tells the search engine spiders not to crawl that link and not give the site any credit of being linked from your website.
rel="nofollow" keeps your webpage from leaking pagerank to where it's linking to. search: Google Pagerank.
nofollow is an HTML attribute value used to instruct some search engines that a hyperlink should not influence the link target's ranking in the search engine's index. It is intended to reduce the effectiveness of certain types of search engine spam, thereby improving the quality of search engine results and preventing spamdexing from occurring.