This is really an interesting topic when it is applied to programming classes. In one of my 400 level java classes we had to write a program, our professor said we could talk about functionality and code and design together as classmates, but each was responsible for writing their own code.

During lab time there were a group of 4 -6 people huddled around a computer while one person coded. Apparently when they were done, the person coding sent all them a copy of that code and they all turned in the same code. Well, it was obvious to our professor who had written the code and who just observed (it was a Saturday, he wasn't in the room), but they were all basically guilty.
Our professor tried to get a couple of us who observed them working to basically testify against them at one of the school's 'academic violation board' meetings so they could be put up for expulsion. Our professor was basically on a witch hunt.

But its pretty much retarded to copy code unless you can really change it up (which isn't too hard really), but that professor would actually use those code comparison applications to check for cheating (can't remember name of application)