Thanks for the article (and lead-off links as they were good info too) but I did not quite get – if there was a penalisation by Google for sculpting – from the article or whether it was just bad practice? And also to echo what someone else asked ‘is it WORTH actually undoing this type of work on websites SEO’s have worked on’ or simply change the way we work with new sites?
Bad Idea, many, many websites nowadays use nofollow in every single external link to sustain the value of their PageRank, not only to prevent comments spam, which is in my opinion defeating the original purpose of nofollow. Google should’ve “marketed” nofollow as nospam without going into much details of how that links to PageRank to keep webmasters away from getting into the idea that nofollow means better PageRank

If you can leave a guest post, leave it. Why? Because it can create relevant referral traffic to the website, you own. Everything you should do is to make your post valuable and without spam. Just important core information which won’t be spoiled by backlinks injecting. It’s better to have contextual linking. In other words, the links are to merge into your text.
Search results are presented in an ordered list, and the higher up on that list a site can get, the more traffic the site will tend to receive. For example, for a typical search query, the number one result will receive 40-60% of the total traffic for that query, with the number two and three results receiving significantly less traffic. Only 2-3% of users click beyond the first page of search results.
So, now we're getting to backlinks that have relatively little, or even negative value. The value of web directories has diminished dramatically in recent years. This shouldn't come as a surprise. After all, when was the last time that you used a web directory to find anything, rather than just doing a Google search? Google recognizes that directories don't have any real world worth, and so they don't accord much value to backlinks on them. But there is an exception to this rule. Submitting your website to local, industry-specific and niche directories can net you worthwhile backlinks. But if you can't imagine a circumstance where someone would use a certain directory, then it's probably not worth your time.
There are things like solo ads that you can buy or join up with JV partners to help sell whatever it is that you're peddling. But at the outset, you're going to find it difficult to succeed in the internet marketing field. Ensure that you learn the right skills along the way so that you can become an effective online marketer. It doesn't matter how slow you go, as long as you don't stop, you'll reach your goals.
Page and Brin's theory is that the most important pages on the Internet are the pages with the most links leading to them. PageRank thinks of links as votes, where a page linking to another page is casting a vote. The idea comes from academia, where citation counts are used to find the importance of researchers and research. The more often a particular paper is cited by other papers, the more important that paper is deemed. 
Using ‘nofollow’ on untrusted (or unknown trust) outbound links is sensible and I think that in general this is a good idea. Like wise using it on paid links is cool (the fact that all those people are now going to have to change from JavaScript to this method is another story…). I also believe that using ‘nofollow’ on ‘perfunctory’ pages is also good. How many times in the past did you search for your company name and get you home page at number one and your ‘legals’ page at number two. Now, I know that Google changed some things and now this is less prominent, but it still happens. As much as you say that these pages are ‘worthy’, I don’t agree that they are in terms of search engine listings. Most of these type of pages (along with the privacy policy page) are legal ease that just need to be on the site. I am not saying they are not important, they are (privacy policies are really important for instance), but, they are not what you site is about. Because they are structurally important they are usually linked from every pages on the site and as such gather a lot of importance and weight. Now, I know that Google must have looked at this, but I can still find lots of examples where these type of pages get too much exposure on the search listings. This is apart from the duplicate content issues (anyone ever legally or illegally ‘lifted’ some legals or privacy words from another site?).
Recently being torched for aggressive linking to keep up with competitors and doing things like PR sculpting because they were too. This is very helpful information. We have been undoing as much as we can and removing all the internal no follows was one of the items we have done. We have also gone back to linking to useful sites for our users without the no follows.
That sort of solidifies my thoughts that Google has always liked and still likes sites that are most natural the best – so to me it seems like it’s best not to stress over nofollow and dofollow – regarding on-site and off-site links – and just link to sites you really think are cool and likewise comment on blogs you really like )and leave something useful)… if nothing else, if things change will nofollow again, you’ll have all those comments floating around out there so it can’t hurt. And besides, you may get some visitors from them if the comments are half-decent.
Site owners are using the toolbar to find “good” sites that they should get links from, regardless of the fact that link context is also important, not to mention many, many other factors that are used by Google to rank a web page. Other site owners, getting a gray PR0 toolbar for their site, immediate assume the worst, that they’ve been blacklisted.

That type of earth-shattering failure and pain really does a number on a person. Getting clean and overcoming those demons isn't as simple as people make it out to be. You need to have some serious deep-down reasons on why you must succeed at all costs. You have to be able to extricate yourself from the shackles of bad habits that have consumed you during your entire life. And that's precisely what Sharpe did. 

Thanks Matt for the informative post. However I do have some questions regarding blog comments. Let say a blog post of mine have PR 10, the page has 10 links, 3 of them are my internal link to my other related post, the other 7 links are external links from blog comment. Based on your explanation, even the 7 external links are nofollow, my 3 internal link will only get 1 PR each which is still the same if the 7 external link is dofollow. Therefore there is no point of adding nofollow for the sake of keeping the PR flow within your own links. Is this correct?
After that, you need to make a choice about how to construct an online presence that helps you achieve that goal. Maybe you need to set up an e-commerce site. If you’re interested in publishing content to drive awareness and subscribers, look into setting up a blog. A simple website or landing page with a lead capture form can help you start developing your brand and generating traffic. A basic analytics platform (like Google Analytics, which is free) can help you start to measure how you are tracking towards your initial goal.
Any definition of internet marketing needs to come along with a definition of things associated with it such as affiliate marketing, network marketing, multi-level marketing and so on and so forth. Some of these are less legitimate than others. For example, affiliate marketing is a tough nut to crack unless you have a massive following or you understand how to build excellent squeeze pages and effective sales funnels.
The PageRank algorithm outputs a probability distribution used to represent the likelihood that a person randomly clicking on links will arrive at any particular page. PageRank can be calculated for collections of documents of any size. It is assumed in several research papers that the distribution is evenly divided among all documents in the collection at the beginning of the computational process. The PageRank computations require several passes, called “iterations”, through the collection to adjust approximate PageRank values to more closely reflect the theoretical true value.
These are ‘tit-for-tat’ links. For instance, you make a deal with your friend who has a business website to have him place a link to your website, and in exchange your website links back to his. In the dark ages of SEO, this used to be somewhat effective. But these days, Google considers such 'link exchanges' to be link schemes, and you may get hit with a penalty if you're excessive and obvious about it. This isn't to say that swapping links is always bad, but if your only motive is SEO, then odds are that you shouldn't do it.
Description meta tags are important because Google might use them as snippets for your pages. Note that we say "might" because Google may choose to use a relevant section of your page's visible text if it does a good job of matching up with a user's query. Adding description meta tags to each of your pages is always a good practice in case Google cannot find a good selection of text to use in the snippet. The Webmaster Central Blog has informative posts on improving snippets with better description meta tags18 and better snippets for your users19. We also have a handy Help Center article on how to create good titles and snippets20.
Game advertising - In-Game advertising is defined as "inclusion of products or brands within a digital game."[49] The game allows brands or products to place ads within their game, either in a subtle manner or in the form of an advertisement banner. There are many factors that exist in whether brands are successful in their advertising of their brand/product, these being: Type of game, technical platform, 3-D and 4-D technology, game genre, congruity of brand and game, prominence of advertising within the game. Individual factors consist of attitudes towards placement advertisements, game involvement, product involvement, flow or entertainment. The attitude towards the advertising also takes into account not only the message shown but also the attitude towards the game. Dependent of how enjoyable the game is will determine how the brand is perceived, meaning if the game isn't very enjoyable the consumer may subconsciously have a negative attitude towards the brand/product being advertised. In terms of Integrated Marketing Communication "integration of advertising in digital games into the general advertising, communication, and marketing strategy of the firm"[49] is an important as it results in a more clarity about the brand/product and creates a larger overall effect.
In an effort to manually control the flow of PageRank among pages within a website, many webmasters practice what is known as PageRank Sculpting[65]—which is the act of strategically placing the nofollow attribute on certain internal links of a website in order to funnel PageRank towards those pages the webmaster deemed most important. This tactic has been used since the inception of the nofollow attribute, but may no longer be effective since Google announced that blocking PageRank transfer with nofollow does not redirect that PageRank to other links.[66]