I'd ask the candidate to pair program with a developer for a week. You'll know immediately if the candidate can integrate with the team. Plus it'll reveal his knowledge during the session.
Could be wrong, but I think the question was "what interview questions?" The interview is, for argument's sake, the second screen (the first one being the review of the cover letter/email and resume/cv or whatever). The third screen might be an audition or trial, such as you've described.
Right. This is to filter out people before they waste whole days of your teams' time.
I wish I had the time to sit down with every candidate and program with them for a week :) Unfortunately, none of us do, so I'm looking to come up with a handful of questions that can effectively weed out the inexperienced from the experienced as early as possible in the hiring process.
They don't necessarily have to be questions like "How does routing work in Rails?", they could be "interactive" questions that involve writing a relatively small amount of code (e.g. write a Generator to do X).