What does Google do with "nofollow" links

The short answer to the question in the title is a big "WHO KNOWS?!" The longer answer has been batted around other blogs for a while. I just noticed something I found interesting. I have owned tecbrat.com for quite a while, but never tried to optimize it. I have not set out to do any link-building. I put my link in forum signatures and such, but that's about it. I did a "link:" search today for my website and it only came up with one link. When I followed that link, it was a page that I thought for sure had 'rel="nofollow"' on all their links. See this screen shot:

I cropped it and circled a few things. Somehow, the only page that a "link:" search brings up only links to me twice, and both of those with a "nofollow" attribute. Whatever Google does with nofollow links, it does NOT ignore them.