I absolutely agree with Dave @ Major Media Company up above.

I may or may not immediately reject the person as a liar (some people really are laid back and easy to work with). I'd put it together with other clues I have about them. But generally, there are always conflicts with other people, even if it's minor. For someone to say they've never had conflicts with anyone, is suspicious.

When I ask this question of a candidate, I want to see how they resolve interpersonal conflicts. I want to see how they work in a team. I want to see how creatively they make the most of what they have.

Fortunately for me, _I_ can be honest about it. =) I think I've been quite successful at working out more difficult work relationships. An essential part of it is, of course, to actually try to get to the heart of the conflict and do my best to resolve my portion of it.

Companion to that, I crack jokes that deride and make fun of myself first. I will make jokes about the other person too, just much more benign jokes and only after I've gotten to know them.

I think this serves several purposes: 1) laughing makes everyone relax; 2) it's safer to make fun of myself than someone else; 3) I cannot be hurt by negative comments about me because I've already said it; 4) most importantly, I show that I understand their point of view which makes compromising and meeting in the middle easier.

I have never known this approach to fail with reasonable people, which most co-workers are (I'm in IT/Software).

-- J.