Where I work we have tried various approaches, including informally asking the applicant various questions that demonstrate how well they know Perl, and written tests, but was has given us the best results is to ask the applicant to solve a simple programming task related to our field of work, something that could be completed by a competent programmer within say 45 minutes; this way we can simultaneously test both proficiency with Perl and more general problem solving/design skills. Given that the number of applicants is not huge, we can afford to let the questions be pretty open-ended, since we are most interested in seeing how the person goes about completing a task.

On the other hand, we do a lot of "tactical programming" where I work (by this I mean programs intended to perform a one-time analysis or data processing), which requires a somewhat different set of skills from those of a developer of full-blown software products. The problem is that this set of skills is more difficult to test on the spot (at least we haven't found a formula to do it).