I don't use "no follow" on any of my sites and do not have a problem with ranking. As for user generated links - really the only time you need "no follow" is if you have a very large number of spam links that you leave up for a long time. In other words, if you ignore your forums.
There is discussion in SEO forums that if you "no follow" most or all of the links coming from your site - you are telling Google that you have no confidence in the content of your site and no control either - and this can result is a lower ranking from Google rather than the higher ranking webmasters are looking for.
Since not using "no follow" has never hurt me - that is the view I tend to agree with.
The most valuable use for "no follow" is for helping control duplicate content (and this is being used appropriately in UBB) which can ruin your rankings in Google more than almost anything else you can do to a website.
