When to use No Follow ?

As long as you link to quality sites then you'll
be ok. Page rank is more about how many links
you have pointing to your site than what sites
you point to so whether you use no follow or
not shouldn't affect PR.

Also the no follow tag is often ignored
by the search engines anyway. I've tested this before
on a few occasions and have gotten my sites indexed
from just one link from another website that was supposed
to be no follow.

To be honest I don't even care about PR these
days. All I care about is how much traffic I'm
getting and how much money that traffic is
making me. PR doesn't make you money, traffic
and conversions does.

Will Cooper

Pagerank does matter as most large websites get a large amount of traffic from search engines. As far as using no-follow, I use it on my about me page, privacy policy, contact, etc. Just to basically save the PR juice for the pages that matter.

I fear you will never get a definitive answer about draining your PR either way!

If you are of the school, however, that believes outgoing links can drain PR from your site, there are ways to prevent this from happening. As you mentioned, you could go the "rel='nofollow'" route. Another is to use a java-generated form. Search engines don't read javascript well, so such a form-based outgoing link will not drain PR from you.

eg. Suppose you use an aWeber static, in-line form for an opt-in on your page. aWeber allows you to choose between an HTML generated form and a java-based form. I always choose the java form because that outgoing link won't drain PR (and it is preferred anyway because it allows more tracking of your subscribers as related to click-throughs).

Also remember that how you do the internal linking between pages on your site WILL affect the PageRank of the component pages. You likely have certain pages for which it is more important that you have a high PR. Simply linking every page to every other page, or linking them all in a circular fashion tends to spread PR out more evenly. Playing with your linking structure can maximize the PR of your index page (or whatever page you want the most PR for).

Also keep in mind that PageRank is most certainly based on some kind of logarithmic (or exponential) scale depending on how you look at it, much like the Richter Scale used for earthquake measurements or the pH scale used in chemistry. Small changes on the scale indicate much larger changes in the phenomenon being measured.

Thus, if you allow a drain on your PR to cause your page to fall from 2 down to 1, while that is not good obviously--it is not nearly as devastating as a fall from 8 down to 7. Conversely, it is relatively easy to push a page from a PR of 0 to 1, but much, much harder to push it from a 5 to a 6. Think of PR as a graph which goes up much faster the farther out you go.

Some will argue that a site like the Warrior Forum could achieve no appreciable PR if outgoing links could drain PR away--since there are tens-of-thousands of outbound links. However, the OVERALL PR assigned to a site (not the individual pages) increases for every page that is added. And, because of the extensive inner linking--and nearly all sub-pages linking to the home page--substantial PR can be achieved by forums and directories even though there are substantial outbound links even if they are FOLLOW links.

Anyway, PR means very little to me anyway. The PR of my pages has nothing to do with where they rank in the SERPs. I am more interested in getting qualified traffic from the SERPs than getting a high PR. As you know, there are tons of pages on the front page of Google for any search term that have a PR of 0.