The best coding interview I ever did was a pair programming exercise using a laptop with one of my prospective co-workers. We worked on a problem for 45 minutes

The best coding interview I ever did was a pair programming exercise using a laptop with one of my prospective co-workers. We worked on a problem for 45 minutes, we conversed naturally about the problem, and there was very little stress. At the end both of us came away with an understand of the others skills and how we worked as part of team. I've since used a similar exercise when interviewing people as I've found I get a much better sense of what the candidate can do than placing them in from of a whiteboard.