If you are a frequenter on the web or have done blogging for some time I am sure you must have encountered rel=nofollow. With this post today, I will try to explain what does this and other statements like this means.
First, What is rel?
rel is an attribute of HTML which is used by search engines to gauge the relationship between the target link and the resource on which it appears. The part that is followed by equals to sign is its value.
For example <a rel=”nofollow” href=”en.wikipedia.org”>
The target link en.wikipedia.org goes with a relationship of nofollow on whatever page it would appear.
rel attribute can take many values. We will discuss the important ones like nofollow, enclosure, license and tag . Those who use Windows Live Writer as there blog editor can surely identify them.
rel=”nofollow”:
This is one of the most discussed rel value on the web. nofollow value for rel tag was invented by Matt Cutts – head of the Google web spam team. The idea behind this was to stop and limit spam on the web. When you use nofollow with any link , it signifies that though you are linking to the site but it should not carry any weight from you. In other words, my linking to this site should not mean that I approve this site. This is turn mean that you would not pass any page rank to the linked site. An example can be found in most comment systems of popular CMS like blogger and wordpress. If you take a close look you will find all the links that go out from comment are nofollow by default.
Syntax of rel= “nofollow”:
<a href="http://en.wikipedia.org/wiki/Nofollow" rel="nofollow">Wikipedia</a>
rel=”enclosure”:
When rel=enclosure is appended with a link it means the link refers to downloadable format like pdf, movie, txt file etc. Generally a downloadable content doesn’t get changed. So it also indicates to the search engines that the referred linked should be cached for future purposes.
Syntax of rel=”enclosure”:
<a rel="enclosure" href="labs.google.com/papers/gfs-sosp2003.pdf">Google File System</a>
rel=”license”:
By adding rel="license" to a hyperlink, a page indicates that the destination of that hyperlink is a license for the current page.
Syntax of rel=”license”:
<a href=http://creativecommons.org/licenses/by/2.0/rel="license">cc by 2.0</a>
The author indicates (to the search engines) that the page is licensed under a Creative Commons 2.0 Attribution Required license.
Source
rel= “tag”:
It shows that the destination of the hyperlink refers to a tagging system. Now this tag system could be one from external sites like technorati, delicious etc or from your internal CMS. WordPress provides internal tagging system.
Syntax of rel=”tag”:
<a rel="tag" href=”http://del.icio.us/popular/technology”>
If you go on this URL you will find all sites that are tagged under “technology”. For those who are confused between tag and categories refer to this excellent article from Lorelle
Ankur Jain is a Software Engineer in Test Automation. After a 5 years stint with Accenture and Oracle, he started his eLearning company. A long-time blogger and proud owner of the "Learn" series of websites. 
I read somewhere (cant find the link ATM) that you could use any word (value) in the rel attribute, for example if I was linking to my resume I could have rel=”resume” as an SEO technique. If this is not the case I better start deleting all the rel tags i have placed everywhere
@Byron: am not sure of that is really the case. My understanding is that these are the standards defined by Microformats.org