Having recently just finished interviewing for fellowship in gyn onc, I was asked the question at about every program I interviewed at. There's only 37 programs in the country, and pretty much everyone who's in academics knows each other. I'm pretty sure there's alot of talking that goes on.
Although residency has many many more programs, most program directors know each other ~ especially in the same area of the country. Trust me, they talk to each other. We'd hear from our PD that so and so called him saying that a particular candidate was planning to rank us number one. And everyone knows someone somewhere...
I think the easiest thing is to be honest. Obviously, I wouldn't say "I think your program sucks and I wouldn't come here in a million years," but I'd stick to the truth.