> Guy proceeds to seriously ask me about low-level memory management
Some internship candidates would have been able to answer those questions.
I interview a dozen or so internship candidates every year, and i see a lot of variation in what they know. They're all good students from good universities, so they've got a grounding in theoretical computer science, and they've all done some coursework projects and one or two group projects. But some have done a lot more than that. One was into competitive programming. One had built a business around automated eBay sniping. One had built a few iOS apps that were making money.
My approach is to hire anyone who has any practical experience (a group project is fine) and doesn't try to bullshit me. But i could imagine some people focusing more closely on the handful of people with deeper experience. It depends on what you want your internship programme to do.