At what level is nofollow honored?

Matt's answer:
CUTTS: Here’s a question from tzd from Earth. Tzd asks, “I didn’t get to go to PubCon this year but heard but I heard that if there was at least 1 unfollowed link in a webpage, all links were considered unfollow?” So this is talking about a question where if you have one page linking to another page, and one of the links is unfollow or nofollowed. What about the other links on that page? So I asked about this. And the team said nofollows are done at a specific link level, not at a page level. So you look at the nofollow; and if this link is nofollow, then it doesn’t carry any weight but all the other links are unaffected. Then we’re going to dig down and check whether there were any corner cases or any thing other possible explanations for people seeing anything like that in the link extraction. But in general, that’s what you want, is nofollow should apply at a link level that shouldn’t apply to other links on the page because that opens up some really interesting corner cases. So the last I heard, the team are going to dig in and just make sure that there’s no issues with that, but nofollows apply at an individual link level. They don’t affect the other links on the page.
by Matt Cutts - Google's Head of Search Quality Team