Peter Norvig in his essay "Teach Yourself Programming in Ten Years" says,
"If you want, put in four years at a college (or more at a graduate school). This will give you access to some jobs that require credentials, and it will give you a deeper understanding of the field, but if you don't enjoy school, you can (with some dedication) get similar experience on the job. In any case, book learning alone won't be enough. "Computer science education cannot make anybody an expert programmer any more than studying brushes and pigment can make somebody an expert painter" says Eric Raymond, author of The New Hacker's Dictionary. One of the best programmers I ever hired had only a High School degree; he's produced a lot of great software, has his own news group, and made enough in stock options to buy his own nightclub.
# Work on projects with other programmers. Be the best programmer on some projects; be the worst on some others. When you're the best, you get to test your abilities to lead a project, and to inspire others with your vision. When you're the worst, you learn what the masters do, and you learn what they don't like to do (because they make you do it for them)."
Actually I think its the problem solving questions that they ask you. I may be mistaken,since I don't work there. Theres an article in businessweek or b2.0 about it right now. Things such as "You are shrunk to the size of a nickel..preserving your density proportional...and put in a blender...you have 5 seconds before the blades start moving - what do you do?
Google is a total slut for a high GPA, make no mistake about that.
Google also has a list of schools that are considered top-tier, and if you're not from one of those, you're unlikely to be hired. I don't believe Google has always been this way--and I think the pressure to raise the hiring bar in so many artificial ways comes not from any elitism, but from the fact that Google is hiring way too fast, and the folks at the top know it. By ruling out everyone below a quite high academic threshold, they've cut down the number of applicants under consideration.
I suspect, but don't know for sure, that if you have a long track record of producing good results, you can still get hired by Google. I received a recruitment letter from them, but never followed up by going through the hiring process to find out if someone with a couple of two year community college degrees (and no computer science classes at all aside from AP high school classes--I tested out of all of the computer-related classes for my degrees) could get hired there, based on the strength of accomplishments, alone. The letter came two days after I accepted funding from YC, and a few months after we started making money with Virtualmin, so it wasn't really of interest at all. But now that I think about it, it would have been an interesting experiment.
You're right for the vast majority, but Google does make a few exceptions. One of my friends has no college degree but was hired by Google as a programmer almost entirely based on his rank on the competitive programming site TopCoder.
He is referring to Jamie Zawinski. http://norvig.com/21-days.html