nofollow is no longer valid from Google. This was changed a couple weeks ago.
The only news I heard about nofollow was related to internal page rank sculpting for SEO purposes and not related to whether or not you vouch for external link targets.
From my understanding, Google still considers nofollow valid and is still encouraging its use for any links pointing to a target you will not stake the reputation of your site on, especially ones contained within user generated content and ads, preventing any of your page rank from flowing to those sites. It does not hurt you to use them on links with external targets.
What they changed is how much page rank flows to the links not
containing that attribute.
Before if you had 3 links on a page, pointing to pages within your own site (an about page and 2 content pages) you could concentrate page rank that flowed to those 2 content pages and boost it by throwing nofollow on the link to the about page. That way the remaining 2 links would each get 50% of the available google juice.
Now, with the change, instead of dividing the PR juice between the links without the nofollow attribute, you get the same amount flowing to those 2 pages, even if the 3rd has nofollow.
So instead of boosting the page rank of pages on your own site by pushing 50/50, you still get only 33% going to each, with the exception of the one that has nofollow. That one would still get nothing.
Nothing was changed with regards to how much of your page rank would go to any link with the nofollow attribute. They still get nothing.http://searchenginewatch.com/3634387http://www.mattcutts.../pagerank-sculpting/