From the wiki for
nofollow:
# Google states that their engine takes "nofollow" literally and does not "follow" the link at all. However, experiments conducted by SEOs show conflicting results. These studies reveal that Google does follow the link, but does not index the linked-to page, unless it was in Google's index already for other reasons (such as other, non-nofollow links that point to the page).[7][8]
# Yahoo! "follows it", but excludes it from their ranking calculation.
# Bing respects "nofollow" as regards not counting the link in their ranking, but it is not proven whether or not Bing follows the link.
# Ask.com ignores the attribute altogether.