I take issue with this article because it would come across to me as a red flag about work-life balance. That an employer would expect you to be doing something programming related in your spare time comes across as a bit self-serving. Instead, I would ask "What would you like to develop in your spare time, if you had any?" That way they can answer the same as his question if they are working on stuff, but can still…
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I think you're reading too much into it ... I've been doing this for 7 years (not that long) and without fail all the really good developers I've ever known or met have built something in their spare time ... just for kicks, a webserver, a firefox addon, some game, a ruby gem, PHP script, a macro for their favorite editor, some electronic gizmo ... something.
Not all developers do it, but the very best do ... so its not a disqualifying question, but it sure does allow you zero in on the very best developers rather easily.
As an aside ... you should always be looking at code, when you're hiring developers. If they can't give you any examples, then make them write something ... I'm continually shocked by how many companies make $70+k investments in people they've never seen in action.