Nowadays almost all companies do a phone interview before calling a candidate on-site. The reasoning is fairly straight forward - calling someone for an on-site interview takes time, resources, and often involves travel reimbursements. Companies do a phone screen to make sure a candidate is worth calling on-site.
Think of the phone screen as a mini-me of the real monster - the day long, grueling, on-site interview. If the on-site interview is for deciding if you are a good fit for the company and the work, the phone interview is a 45 minute check to decide if you are a good fit for the on-site interview.
Even though a well done phone interview in not enough to get you a job, a badly done interview will certainly deprive you of one.
I found an interesting blog post where a developer has documented an interview they had with a large software company. They have documented both, the telephonic and the on-site interview. You might find it a good read.
In the rest of the article I'll discuss some tips that will help you prepare and succeed in a telephone interview.
1. Be ready 10 minutes before the interview
Make sure you don't start fumbling to get settled when the interviewer calls. It's best to settle down in a quiet place about 10 - 15 minutes before the interview.
If you plan to speak on your cell phone then make sure it has a good signal and enough battery to last for the entire duration of the interview. Clear the desk in front of you and have a copy of your resume in clear sight. Some people keep a soft copy of their resume open on a computer, while others keep a hard copy and shut down the computer to minimize distractions from emails and instant messages. While it's perfectly reasonable to shut the computer for more focus, sometimes interviewers might want you to write some code on an online editor. It's best to keep the computer nearby even if it's shut. On the same vein, also make sure your internet is on.
Finally, keep a glass of water in front of you and relax while you wait for them to call.
2. Be prepared for the 'about yourself' question
Most interviewers like to begin phone interviews by asking the candidate to say a few things about herself. It's a popular strategy with interviewers because it puts the candidate at ease and the interviewer can get a little background about the candidate, a peek into their soft skills, and a slightly clearer (beyond the resume) idea about the work they have done recently.
Since this question is almost certainly going to be asked, you can take advantage and be well prepared. To lay the ground rules first, overall, you want to be honest and keep your tone friendly as well as confident. A good way to start is by telling the interviewer how long you have been working in the software industry, your educational background, your most recent project, the role you played in it and the technologies you worked with in that project, and specific technologies/skills that you are strong in.
Sometimes candidates tend to brag a little bit when they describe their strengths. Try to avoid that because bragging might put the interviewer off or it might induce them to go the extra mile to try and prove you wrong.
Even though most interviewers have a well defined agenda of what they want to ask they always have some additional time where they discuss your strengths and the technologies you have worked with recently. Be careful about what you mention in these areas because it will certainly influence the additional questions that you will be asked.
3. Listen to each question carefully and repeat it in your own words to the interviewer
Chances of miscommunication are significantly increased in a telephonic interview, because neither of you can see the other's face. An effective way to prevent this is to rephrase the interviewers question in your own words before attempting to answer it. Along with preventing miscommunication it also shows diligence on your part, which is always a good thing, especially in software where small oversight is often the cause of big bugs. Needless to say that if you don't understand a question you should say so immediately, so the interviewer can rephrase the question to either make it clearer or add more details.
4. Pace your speech
It is very important to pace your speech in a telephone interview, once again, because the interviewer cannot see you. If you talk too fast she may not understand what you are saying and will have to ask you to repeat, and if you pause for a long while she may think you are no longer on the line. The best way to handle this is to speak at an even pace when you know the answer and think aloud when you don't. The latter is especially important because most interviewers like to get a peek into their candidate's thought process. By thinking aloud you not only keep the line of communication open, but you also allow them to understand how you think.
Sometimes we tend to talk faster when we are nervous. In this case it helps to be mindful of your own mental state during the interview and follow the three rules of scuba diving: Stop; Breathe Normally; Think Logically.
5. Send a thank you note after the interview
Most interviewers are usually pulled away from their already busy schedule to conduct an interview. Showing gratitude and good manners is a small but nice way to thank them. It's always a good idea to send a thank you note to the interviewer after an interview and CC the recruiter if they are involved.
If you get butterflies in your stomach trying to figure out how well you performed, then check these points to figure out how well did. But most importantly, relax, and move on. The interview is done, there are other things to do in life, so learn and get on with them.