Tips from Joel on hiring:

Smart and Gets things done - aptitude
Make A Decision - Hire or No-Hire

Here's a typical plan for interviewing a programmer:

1. Introduction
2. Question about recent project candidate worked on
3. Impossible Question
4. C Function
5. Are you satisfied?
6. Design Question
7. The Challenge
8. Do you have any questions?

Before the interview, I am very, very careful to avoid anything that might give me some preconceived notions about the candidate. If you think that someone is smart before they even walk into the room, just because they have a Ph.D. from MIT, then nothing they can say in 1 hour is going to overcome that initial prejudice. If you think they are a bozo, nothing they can say will overcome that initial impression.

Design is about asking questions - Jonathan Ive (Link)

Interviewing is more of an art than a science, but if you remember the Smart/Gets Thing Done principle you will be in good shape

http://www.joelonsoftware.com/articles/fog0000000073.html

Thanks Vijay for pointing this link to me :)