In 2004 I got a job at a company that used basically this method, except I didn't get paid for it. I think I got the assignment on Monday, and had to present the results on Friday, so it wasn't over the weekend. Though I could be wrong on that. I could ask the CTO questions (it was a small company), and on Friday I presented it for the other devs, who asked questions, and later voted by email on whether I should be hired. I was, and it struck me as the best hiring process I'd ever seen.