Apparently Google thinks highly of Digg. Pages submitted to Digg are reportedly crawled and indexed within hours. Then they start nofollowing their links. Does this change the nature of Digg?
Not at all. The site still serves the same purpose, and I can't see why Google would change it's functionality in the way it treats links on Digg.
I'm not arguing that nofollow stops the transfer of PageRank. I'm just still thinking that some sort of value is still transferred, whether it be topical, geographical, or whatever, even viral (and I think viral is becoming a forth dimension in ranking, as is seen in the "freshness" of results in the Caffeine update).
A simple nofollow should not change that. It would just imply that Digg does not vouch for the nature of the sites submitted to it, which I would imagine Google has already inferred based upon the large scale of Digg's social nature.
Google isn't dumb. It knows the purpose Digg serves.