One question that seems to consistently bother people is how they should respond to the "salary history" question in pre-screening and interviews. I for one, refuse to ask this question, because:
1. Previous salary has nothing to do with potential salary, and has very little to do with what is fair for the current position.
2. Frankly, since an employer is rarely up front about posting what their willing to pay for a position, it's none of their business about how much you used to make.
Regardless, many employers ask anyways, and depending on the situation here is how I respond:
Pre-screening: This is where an employer asks you to send your salary history and requirements in your cover letter. The proper response to this is not to lie or exaggerate. However, just posting numbers can hurt you as well since if you were underpaid or there were extenuating circumstances (like a killer benefits package in lieu of salary) you need to make that clear as well.
I tend to respond to the history/requirements by giving my title, description of my duties, and my start/end salary for the position. I also make note of any perks like telecommute days, education, conferences, bonuses received, etc since they all affect what I'm willing to accept as compensation. For the salary requirements, I try to give a wide range with wiggle room. For example, if the minimum I would personally accept is $80,000 / yr, I like to say that my expected salary range is $80,000 - $95,000 dependent on the entire benefits package offerred. This basically tells the employer my salary is flexible, and if they throw some intangibles / non monetary perks my way, I'll take less salary. It also helps to take their job description/title and run it through a site like salary.com and point out what you perceive as the fair range for the position. Realize that if your high end matches their low end of their willingness to pay, you'll get the lowest they are willing to pay and your highest amount. In negotiation terms this is "fair" but you did shoot yourself in the foot. That's why a wide range is a good thing, since it will put your high end past what they would be willing to pay but your low end should be inside their range. You may be surprised how good an offer can be if you impress in the interview.
Direct Question in the interview
This one causes a lot of people to freeze, especially if they are embarassed about their current salary. You have a couple of options here:
1. State that your compensation was $X which was fair for the position/duties and that you expect to continue to be paid a competitive/fair compensation for future positions. If you are leaving your old employer because they don't pay you enough, be up front that you feel that you are more valuable than you are being compensated for. Never, ever lie. The only risk to this is that you didn't really answer the question which might annoy the interviewer.
2. When giving a number you expect to be compensated, try not to settle into a definitive value until the final stage. As a starting point for the negotiation, give that wide range I talked about above, and say that you would need more information on the whole employment package before you could commit to any number. This puts the ball back in the employers court without offending them. If an employer is too forceful about getting number X without giving you the information that makes you comfortable, you probably don't want to work for them anyways.
Negotiation is more of an art than a science. It takes courage to negotiate with an employer, especially when you really want or need the job. However, by being open, honest, and flexible, you can not only impress your employer, but also get what you really want/need.