I never use it myself Mike. I suppose it is useful is some situations - like this forum software where some of the internal links to the individual forums use "no follow" in an attempt to avoid duplicate urls for the same page which Google does not like.
I don't think any external links should use "no follow" - even to control comment spam. Better to moderate comments and show that you are in actual control of the links leaving your site and the content on your site. Using "no follow" may just tell search engines that you let anyone post anything to your site - or that you post links that you consider to be of no value. Either way, it may be a flag that your page / site is not necessarily of good value

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