In this article comments made by Matt Cutts are interpreted for the purposes of targeting PR away from inbound (and outbound) links where it is wasted.
To achieve that search engine optimal configuration of your internal linking structure, you need to think strategically about how you "spend" the link juice that has been bestowed on your site through inbound links.
Rel=nofollow (which can be inserted into the HTML of the link like so: <a rel=nofollow href="http://searchengineland.com/whereever">) was originally developed by the search engines to remove the incentive for blog comment spamming, and the search engines positioned the nofollow as a way to not "vouch" for a link (i.e., not treat it as a "vote" that passes link juice). But the engines have evolved their thinking. They realize now that rel=nofollow is a much more versatile tool than when it was first conceived. Matt Cutts of Google was quoted recently as saying:
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clipped from searchengineland.com
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