I got thinking about the recent Business.com fiasco. Isn't placing links in your editorial content a way of telling site visitors that you trust those links? And then using nofollow on those links is a way of telling search engines you do not trust them?
Make pages for users, not for search engines. Don't deceive your users or present different content to search engines than you display to users, which is commonly referred to as "cloaking."
I would recommend every serious webmaster take a hard look at abandoning the use of nofollow in all cases other than user generated content. The web is founded on links. Don't ghettoize the web, and do not ghettoize your site. Save the Internet!