Question about nofollow meta tag

Does meta name="robots" content="nofollow" only apply to external links when used as a meta tag? Or does it apply to all links?

And if it only applies to external links, would there be any drawbacks to use this meta tag, rather then having vBSEO process all external links at nofollow anyway? I know i'd lose the ability "whitelist" certain domains, but I really don't have any that need it anyway at the moment.

That tag applies to all URLs, both external and internal ones.