B) for sure. i haven't had that used as an interview technique on me, but i've been on the interviewing end of that, and the feedback from the candidates was great. additionally, we felt it gave a great sense of what it'd be like to work with them, and based on the people we've hired so far using pairing as a component of the interview, it's a better predictor than anything else i've ever seen.
we also ask for a presentation on prior work or a prior project, we do some architecture whiteboarding, and we have talkier personnel type parts. but currently, the hour and change pairing exercise is the only programming exercise, and we were happy enough with the results last summer that we're doing it again for an upcoming round of interviews. our setup was a PM, a tech lead, and a "driver" (the person at the keyboard, which is what i was in the exercise). interviewee is the "navigator" (and by not having to type, we get rid of some of the stage fright for syntax errors and such, and just get to see their thought process since it's a pretty compressed timeframe). best microcosm of real work i've seen. one important thing is to give the same exercise each time (one possible risk in our case was that we gave the candidate 3 possible things to choose from, but settling on what we thought was the best choice was part of the test, and all the candidates ended up passing that part, so we never had to compare WIP from two different coding exercises).
apologies for rambling or repetition, dashing this off before i go to bed. but i'm a big fan of this interview approach, and i think it's probably the best thing we've hit on so far in this field, for positions where that would be a reasonable microcosm of what day-to-day work is like. i think it's much better than making someone code on a whiteboard, or giving them a take home or solo exercise, because you get so much more info about other things besides how well they can bang out a single well spec'ed piece of code.