Enter Siloing and PageRank Sculpting
This is simply the activity of controlling what pages of your site share their link love. You do this by adding a "nofollow" attribute to any link that you don't want the search engines to give credit to.
Take the example Matt Cutts gives. Maybe you have a friend who is a total underground, blackhat, do-no-good, evil-empire, anarchist spammer. You know he's bad to the bone. But you have a soft place in your heart for him and you want others to check out his site. All you have to do is add a nofollow attribute to the link. It would look like this:
<a href="http://www.total-underground-blackhat-do-no-good-evil-empire-anarchist-spammer.com/" rel="nofollow">a blackhat spammer</a>.
In this article, Joost de Valk, a Dutch SEO and Web developer, quotes Matt Cutts as saying, "There's no stigma to using nofollow, even on your own internal links; for Google, nofollowed links are dropped out of our link graph; we don't even use such links for discovery." Joost's article explains PageRank sculpting in more detail if you find this topic fascinating.
His article also talks about "siloing." He points to an article on BruceClay.com that discussed this concept in a great amount of detail.
Siloing is the idea of only linking out to other pages on your site and other outside resources that relate to that specific category or topic. So, if you had a cherry ice cream cone page, you would only link to resources discussing cherry ice cream cones. Information about chocolate ice cream cones and ice cream sundaes would either not be linked to or would be linked to using the nofollow tag like I showed you above.
Controlling Link Flow Using Robots.txt
Finally, there's more than one way to block link love. You can also add this information to your robots.txt file. This handy file goes in the root folder of your Web server and tells the search engines how to not spider and index all sorts of things.