Community News: The Duplicate Content paradox

Back in February there was much discussion amongst SEO Guru's about the use of the Canonical Tag and the three major search players publicly announced their joint effort.
The industry responded favorably as the tag would give users more control over reducing links to substantially similar (duplicate) content. At the time of writing, all four major search engines support the Canonical Link Element.

 

Now, nearly four months after the initial announcement, there seems to be a problem. During a session at SMX Advanced, Stephan Spencer of Netconcepts revealed that he had found some examples of the Canonical Tag not being obeyed by Google. He raised the issue that the Canonical Tag is merely a hint to Google and could not be fully relied on.

As a result, Stephan recommends using 301 redirects since they are direct and will be obeyed. Stephan believed that Google misunderstood the explanation of his position since a debate broke out about nofollow and PR sculpting during the session and involved Matt Cutts and Nathan Buggia. Lisa Barone, who liveblogged the debate. Matt indicated that nofollow was not as effective as it once was. Nathan also stated that Bing’s position in relation to using nofollow for PR sculpting was not a very valuable tactic for users to implement.

At the time of writing, there has been no clarification of the issues but if you are activiely using nofollow to control your Link Juice, you would be wise to review your useage of the nofollow tag. As *nuke users, there are a number of alternatives to using nofollow such as wrapping links within the is_user function so only registered users can see the links or even use a form of referrer blocking to 'hide' links from specific bots.
Some *nuke users are already wrapping paid link ad code to avoid being penalised but some draconian search enfines who look unfavourably on paid link ads.

What's your opinion?
Do you think the nofollow issue will be resolved?
Do you think 'wrapping' links or ads in code to prevent them being seen by bots is a viable alternative?