The quick answer is yes, they are nofollow and no, google will not penalize you for using InLinkz.

Now the complete answer:

we comply to google webmaster guidelines, and especially the "link schemes" part ( which may be relevant for link parties. 

Regarding people that link to parties, outgoing links from the InLinkz widgets, are nofollow and there is not even an option to have them otherwise. This is done to not characterize the links as black hat link building and be penalized by Google.

Moreover, all links in the InLinkz linkup tool, are directed to one specific page on InLinkz, which is invisible to the google search engine, through robots.txt so as not to be considered an attempt to pass page rank (this is what pisses google off :)

Even though links go through inlinkz, we use the so called 301 redirect. What that does, is that it keeps the source referrer (not the pagerank though) and it passes it forward to the target.This is done so your readers can see on their statistics software, that the click has originated from you. 

So, as an InLinkz host, you will not pass pagerank to your readers (and you shouldn't as google would get pissed off) but you still register as your readers click source. (which makes them link up again in the future as they can see where the extra traffic comes from) 

On the other hand, an InLinkz linkup can help you build your incoming links by requiring hard links to your website. Through the required backlinks feature of InLinkz, you can force your readers to add a direct,  hardcoded html link that points from their site to yours, which as you already know is most beneficial to your pagerank. Keep in mind that you need to provide a button or link to your readers yourself if you want this to be done properly. If you are a high-ranked blog, you would probably want to provide them with a button with a nofollow attribute set to its <a> tag.

And of course the usual benefits apply: increased traffic and social exposure which creates even more traffic and loyal readers.

In any case, we are constantly watching google's guidelines, which are indeed targeted on a better web, and do our bestto make the inlinkz widgets support this by connecting people and sharing talent, while complying to thoseguidelines so our users can benefit as much as possible from using our services. 

Script codes leading to inlinkz pages (e.g. the code) are also set with a nofollow attribute of course.

See the code breakdown of an inlinkz link (the nofollow attribute is noted)