Today, Rand explains the downfalls of excessive pagination. Rather than having a site laid out with thousands of links across spread over hundreds of pages, use subcategories. The problem with having too many links over multiple pages is that for search engines and people, it takes too many clicks to get to the detailed content.
Using subcategories can improve your site dramatically, even if users prefer to navigate other ways. You may have multiple ways for users to navigate the site, but direct the search engines through your subcategories using NoFollow’s for the hundreds of extra pages.