nofollow PageRank sculpting is dead, but my guess is Matt's announcement will force more people into PageRank sculpting (via other means), not less. Why? Because the ROI of PageRank sculpting for some people (especially high traffic bloggers) have suddenly gone up. For example, say you write a hot blog post that gets 10,000 backlinks, but you also get 200 comments, and you only got 20 internal links on that page. That means 90% of link juice flowing into that page including juice from other pages on your domain leaves the site instead of flowing into other internal pages.

That's not necessarily a bad thing in terms of ranking - you still got a bunch of anchor text pointing at that page. But if you are shooting for deep index penetration (e.g. have as many IDX pages in the main index as possible - not in the supplemental index) - you could use that extra link juice. But most real estate sites won't have an issue because in general I don't see them linking out all that much on every page.

While removing nofollows isn't necessarily a bad idea, Vanessa Fox pointed out that nofollows can still faciliate crawling. Google will only crawl a limited number of pages from a site a day (you can see the average in Webmaster Tools). That number depends on your domain's total link juice and also partly on how often you update your site. So you can help get your most recent and important pages crawled before less important pages by moderating Googlebot's crawling behavior using nofollow as well as other things like setting crawl frequency in sitemap XML.

It also means that sites like Wikipedia and Trulia that were previously seen as PageRank horders are actually giving away a ton of link juice to the rest of the web, since Matt seems to suggest that nofollow PageRank gets redistributed to the rest of the web (at least that seems to be the popular interpretation of what he said).

Bottom line is this announcement isn't something a small-medium site owners need to be concerned with too much IMO.

Here are a few other discussions you might find interesting:

http://www.seomoz.org/blog/google-sa...-with-nofollow

http://www.webmasterworld.com/google/3934042.htm

http://windrosesoftware.com/sculpting