In addition to having demonstrable ability (thru side-projects for example), I'd also want a candidate to explain a technical detail or concept to me. I'd phrase it like ("Explain an interesting technical concept to me - your choice"). This would show me
a) what they think is interesting
b) how well they understand it
c) how good they are at sharing/teaching.
What I've always wanted to do before hiring someone is work with them for a while. It usually doesn't take too long to get a sense of how good somebody is and how easy they will be to work with.
How good a new team member will be on a project is a complex question. The only really good indicator of the outcome is the outcome itself. Giving a good technical interview is not that great a predictor (although better than years-of-experience). What I like about this strategy is that it eschews gimmicks and gets as close to the real situation as possible.
In addition to having demonstrable ability (thru side-projects for example), I'd also want a candidate to explain a technical detail or concept to me. I'd phrase it like ("Explain an interesting technical concept to me - your choice"). This would show me a) what they think is interesting b) how well they understand it c) how good they are at sharing/teaching.