You might want to check out [Jon Jagger][1]'s fantastic [Cyber-Dojo][2].

It's a web based integrated environment designed for doing [deliberate practice][3] of [Test Driven Development][4] and learning about team dynamics. It has lots of small programming tasks (kata's) and supports a range of languages, from Python and Ruby to Java and C++. 

Unlike IDE's designed for productivity, there is no code-completion, syntax highlighting or auto-refactoring, so you get to see what your interviewee can do without these.

The best thing is, after doing a kata you can then go back and look at the red/green progression (or maybe not if they don't do TDD *8') of each of kata. Every compile/test commits the changes to a git repository along with the results of the test.

I think using this for interview coding tests could tell you a lot about not only a candidates ability to solve a problem, but also their approach to problem solving *and* the process they use when not constrained by external factors, just select a kata appropriate to the time you want the candidate spend on it.

If you want your own CyberDojo server, the [whole project][5] can be found at github and there is even a Turnkey Linux appliance virtual machine linked from there, which means that assuming you already have [VMware player][6] or [VirtualBox][7] installed, you can be up and running within a few minutes of downloading the appliance!


 [1]: http://jonjagger.blogspot.com/
 [2]: http://www.cyber-dojo.org/
 [3]: http://jonjagger.blogspot.com/2011/02/deliberate-practice.html
 [4]: http://en.wikipedia.org/wiki/Test-driven_development
 [5]: https://github.com/JonJagger/cyberdojo/wiki
 [6]: http://www.vmware.com/products/player/
 [7]: http://www.virtualbox.org/