Anecdotally, I had a really positive experience writing the HTTP server with TripleByte. I use interview projects to learn new skills and domains, doing so aligns my interest such that even if it doesn't go well I'm better for trying. My project review went reasonably well- we caught a bug, fixed it and tested. I turned down round two due to taking another offer, but genuinely felt like these guys cared about my progress and experience.

I'm now in a position where I'm interviewing and helping shape my organization's hiring practices. We've debated all the different approaches, some people like projects, some like algorithms, and some don't want to do either to get the job. At the end of the day, I really just want data on a candidate's ability so that I can say Yes.