I haven't had to write code in an interview yet, none of my jobs have been as a straight coder.

Yet, I love whiteboards for designing on, it's so easy to scribble stuff up and link things together. I also find it can easier to write small programs in it. I did one last week for a friend, I coded up a solution then said "Nope, we can do that better if we add this to here, and swap that around.".

It would probably be a good idea for you to try and get some practice with a whiteboard, they can make things easier - especially if you're designing/writing a system with someone else.

I personally have put interviewees on the spot, I broke a Linux box and they had to fix it. It's a shame, out of 3 people only one person made it past the first problem... We didn't hire any of them. (Those interviews all degraded into mentoring sessions...)

Cheers!