One company sent me (before the interview) a small technical assignment. After I had submitted the code, an interview was scheduled. The entire interview was an extended code review -- talking about trade-offs, about other potential solutions, etc.

I felt this was much better in that it was less stressful, yet allowed me to demonstrate both knowledge and design skills.

Another company did something similar but more thorough: They invite candidates for a full day of work where they try to solve a small problem. Then the code is reviewed and evaluated together. They also start the day with a 1-hour overview of their current architecture and you get to ask questions and talk about alternatives. I think this gives both sides a better chance of finding the right fit.

I realize this is not always reasonable.