So, with nolock will not take any locks. Will it still honor outstanding locks? For example, if I attempt to select a row with nolock, which another process has put an exclusive lock on, will my select with nolock be blocked, or will it select the row?
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I think the use of "NOLOCK" results in a dirty read which means that the data which is present before some locking has happened. Suppose, if a write lock has been put on a table to update some data and we try to read the data using "NOLOCK", the data which is present before updating is returned to us.
Hope this helps!!

Praveen
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A dirty read actually means reading uncommitted records, not reading records before an update. – JNK Sep 08 '11 at 20:55
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@JNK - just to confirm, you are referring to the difference of [lock [read] update unlock] - before, as opposed to [lock update [read] error rollback unlock] - uncommitted? – aepheus Sep 08 '11 at 21:08