> We had an interviewee (is that a word?) today who said that he didn't know and to me that was a reason to hire him.
I've seen this in interviews too, but my experience on this response is a bit mixed. I appreciate the honesty, but saying you don't know is a dead-end to solving the problem. A better response would be "I don't know X, but it sounds similar to Y which I solved by ...". Even if X and Y are not closely related, it at least shows they have the ability to make these mental connections.