Having been both sides of the interview desk, I can see both sides of the argument.
I've had candidates who can give chapter and verse with technical answers learnt out of books but no idea how to operate in the real world.
I've seen people who make stuff up, just as shown here - and that's more scary because they will tell bare-faced lies and don't own up to what thay don't know. Do they even know how ignorant they are?
The best approach I think is to be honest about what you know and don't, and if you don't, but have a better answer than BOL for what you'd do, for me that's worth having. I would never expect someone to have all the answers, and they may know lots that I don't ask about - but I do want them to be responsible about what they would do when faced with something they don't know about.
2 examples from being the interviewee, years ago:
1. Part programming, part electronics job; the question was about RS232 serial interfacing. I didn't know the answer (which pin does what) but truthfully said I could picture the page of the book I would find the answer in. I wouldn't guess, because who would want someone to do that live? At best, you'd waste time and solder. Result: a job offer.
2. VB5 development job; first question about some property of a TreeView control. I'd done a lot of VB GUI work, but not actually used the TreeView - never needed it. But I knew that with the help, MSDN, etc, I could have a good solution up and running fast. Result: no job offer - they thought I was lying about my GUI experience.
Conclusion: ask / answer questions carefully - who really wants a sometimes-honest factoid spouter? You want someone who'll do a good job and react in the right way when they reach the limits of knowledge.
Mind you, if the limit of knowledge is the char vs varchar thing then all hope is lost...