Google Links
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I am assuming that the list presented by Google Webmaster tools (TRAFFIC | Links To Your Site) is the one that will actually be used by Google for indexing ?
There seem to be quite a few links that there that should not be there. ie Assumed NOFOLLOW links.
Am I working under an incorrect assumption that all links in webmaster tools are actually followed ?
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Yup, afraid your assumption is incorrect, Mark.
Webmaster Tools shows you it's best representation of ALL incoming links it's aware of, both followed and no-followed.
It's not making any attempt to indicate which of those links may or may not be contributing to your rankings.
Put another way - just because Google is aware of links to your site and is listing them doesn't in any way indicate that those links are contributing "juice" to your site.
If you want just a list of the dofollow incoming links, you'll need to use a 3rd part tool - like SEOMoz's Open Site Explorer which allows you to filter the followed separately from the nofollowed links.
Paul