To follow up on what CosmicShadow said, one of my most memorable interviewees was the candidate with an MS Comp Sci who, upon being shown the problem for our team effort design exercise was able to categorize it (something in CS theory I had never heard of), explain what the canonical solution would be, but was completely incapable of writing the for{..} loop that comprised the first part of the solution.

I honestly don't know how it happens. She clearly wasn't an idiot, and she certainly learned a lot of theory but couldn't program her way out of a paper bag. And this was not for an entry level position, either.