target =blank just fine.
It's more of a useability issue. If the link is from a framed page then definitely use the target=blank otherwise the page will be "framed". When linking to PDF's, Word files, Spreadsheets, Zip files, big JPG's, etc. I always use target=blank so someone can continue using my site while the file loads in another window. All others I just link normally.

As a general rule inbound links are always good.

Link to sites that would be useful for your users. Not only is this the foundation of the web ( sites linking to sites) it also makes your site more valuable to your users and therefor more likely to be bookmarked and revisited. I have a collection of bookmarked sites that I always go for for specific info because they are loaded with helpful lists of useful websites. Pulling links because someone doesn't reciprocate it just lame.

No follow rules are for Google's benefit, not yours. Don't worry about it.