Quite a bit of buzz on this topic around in the last while – I guess it must be hiring season.
Seth Godin gave an interview to the UX Pioneers and offered his perspective on asking these questions.

Business 2.0 have an interesting overview on the topic too.

I loved the Richard Feynman view on the manhole covers question [a must read!].

Bottom line on this – don’t be surprised or annoyed by these lines of questioning. We want to see how you deal with the unexpected and we want to see how you cope with an odd situation with (in many cases) insufficient information. In short, this is an opportunity for you to demonstrate how you will behave once you are on the job. Irritation, aggression or defensiveness are not going to be helpful here. More of my thoughts on this topic from the archives here and Ace The Interview have a good forum on these questions here.

One caveat – if you find yourself consistently stumped by these kinds of teasers, then swotting up other people’s ideas and learning off answers probably isn’t going to serve you well. These questions are designed to identify what shape of a peg you are. If you’re not square and the job requires that you be square, there’s not a whole lot of point in pretending that you are …