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Basically if in the HTML of a site, before a link you include rel="nofollow" Google will not index the link. Other search engines have not taken to this as well, but it is a great idea. It allows you to post links without the other person receiving PR boosts from it. This is a great way to stop spammers from benefiting and and it can help you control where your PR is spread to.
I know a lot of forums use it to avoid people posing their links again and again, hoping it will boost their SERP relevance. So, make sure you are getting link backs from good sites, because otherwise you may just be spinning your wheels.
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