That's the whole problem with three-part logic, it adds a third option to the usual true/false pair.  ANSI SQL defines Unknown to handle the case where you're evaluating against rows where you don't know the value.  Take a real-life example:

I have a sibling, who I call Sam.  Is it a boy?  It looks like a simple yes/no question, but you have to answer "Unknown", because you don't have sufficient information.  Since ANSI NULLs represent "Unknown" values, you can't know if they match or not.  (It's counter-intuitive, I know.)

Larry's example:

If NULL = NULL

    Print 'True'

Else

    Print 'False'

seems correct because he assumed two-part logic.  But it's a false-dichotomy; try expanding Jeff's example this way instead (remembering to set ANSI_NULLS ON):

if

(null = null) print 'null = null is true'

else

if not (null = null) print 'not (null = null) is true'

else

print 'neither is true'

That shows it better.  (null = null) isn't true, and it isn't false (not (false) would have been true).  It's neither.

Coming back to Question of the Day, I think we all agree it's poorly written.  After reviewing it, I'd like to see the question changed to:

What does the predicate in this WHERE clause evaluate to? (there are rows with NULL values, and ANSI_NULLS is ON)