I tell them. There is no reason not to. For whatever reason, this seems to be a big point of contention among pre-meds. Especially pre-meds applying to both MD and DO schools.
Here's a little secret: these schools aren't in competition with each other. There are no rivalries. If you interview at Michigan, and they find out you also interviewed at Ohio State, it is not an automatic rejection.
If you interview at an MD school, and they ask you if you also interviewed at any DO schools, there is no reason to lie about this either. A guy I know told me that he applied to every TX school except for TCOM, and the interviewer asked him why he didn't apply there too. Then he questioned if he really wanted to be a doctor, or if he just was worried about what other people thought.
I've also heard about people interviewing at DO schools and getting the "why not?" when asked if they applied to MD schools. And I've heard about DO applicants taking little shots at MD education, only to find out that the interviewer is an MD.
And believe it or not, a lot of these docs at different schools know each other. While it is unlikely that they would call around to check on you, if you give out the vibe that you're lying about something, it would be easy for them to do so.
There is no reason to bull**** these people, and every reason in the world not to. Don't overthink these things, trying to tell them what they want to hear. What they actually want to hear is the truth. How they interpret this information is something you will probably never know. Each interviewer will react differently to your answers. One guy might think its great that you applied to 30 schools, and that it shows a lot of determination. The next guy might think that it is wasteful of you, and that his school is just your safety school. But you will never know how they will react, and there are more people involved in the final decision than just the guy who interviewed you. In fact, your interviewer may just fill out a form, and not even be in the room when they vote on your acceptance.
Just be honest. It is the safest possible decision.