Where I work, an interview is a full day thing. I'm pretty happy with how it works:
After going through an initial resume screening and phone call, you show up on-site in the morning.
You then give a presentation about some recent work you've done. For those fresh out of school, it's generally about their grad work.
Then you have a series of 1/2 to 1 hour interviews through the day, mostly with people who were at your talk that morning.
The individual interviews tend not to be the Google-style "please implement a data structure for XYZ on the board" sort of thing. Rather, we'll ask about things from your talk or your resume that interest us. We might describe some work we've done here, to hear what you think about the problem, how you might have solved it.
A lot of what we're looking for is how well you're able to communicate your responses. We also want to get a feel for personality, how well you work with others and how well your personality will interact with the people here. I believe this place is actually pretty diverse, and I like to think we don't fall into the "culture fit = 20-something white male" trap; however, some of the restrictions and circumstances of the work we do may make some people unhappy and we'd like to avoid that.
We also pick two people to take the candidate to lunch. This is supposed to be a chance to talk more about life in the area and what it's like to work here, although honestly a lot of that comes up during the regular interviews.
After all the interviews are done and the candidate leaves, the interviewers get together, share their impressions, and say whether or not they recommend hiring. The hiring manager then makes the final call.
It's not really suitable to everywhere, I'm sure, but I'm pretty happy with it.