trota with 666 credits as i type, nice!
anyway, there have been tests that say it does follow them and tests that say it doesnt, on the tests that it does follow them its pretty obvious none or very little juice was passed which means that you can safely link to crappy sites with a rel=nofollow however if you are trying to make sure an internal folder etc is NOT indexed, robots.txt it out, dont just rely on a rel=nofollow incoming link to it