Flying Fisherman and Bigbird,
Keep applying, you will get hired eventually. I have been told by several people in charge of hiring (at one time or another) at different companies, that "your resume gets you an interview, your interview gets you a job". That said, some resumes are going to get you closer to the job than others, but if they are interviewing you they want to hire you (otherwise, why waste the time).
I am going to assume that you are both stand-up guys and good pilots, which is what they are looking for, after all the people interviewing you are going to have to sit next to you for three, four, or five days at a time, so they had better be able to stand you. I am also going to assume that you haven't gotten any formal interview prep. I suggest that you do. If you don't know anyone in charge of hiring at an airline there are several companys that will give you interview prep and mock interviews (for a price of course, it's probably worth it). I strongly advise against taking much advice other than interview gouge from other applicants, even if they were hired. They may have been hired, which means they displayed the characteristics that the interviewers were looking for, but they don't necessarily know what those characteristics were.
Now some basics. Always be truthful, and take responsibility for your mistakes. If you got three speeding tickets in two years while you were in college, don't lie about it, explain that you were young and that you have learned from your mistakes and that now you always leave 10 minutes early and set your cruise control to 3 mph under the speed limit.
Don't ever admit to knowingly violating a regulation or company policy, even in a hypothetical situation. A typical question is "tell me about a time you broke a FAR". Bad time to tell them about your perfect barrel roll in the 172. Instead tell them about a time when you were a student, instructor, young cargo pilot, or whatever (I wouldn't say you did it last week) and you blew through your altitude or mistakenly violated some airspace. But don't stop there, tell them how you learned from that mistake and developed your own technique to remind you not to blow though an altitude or violate airspace. A lot of questions also begin with "what would you do if...". These quesions are usually to see how you would react to some sort of personality conflict, but may through in a FAR or company policy. Some classic examples are the captain who has a drink before the FAA 8 hours but after the company 12 hours. Remember he can't fly and you can't fly with him or you both would be breaking company policy. People make mistakes, in this case it wasn't your mistake but you could offer your advice. Having a drink isn't that big of a mistake, so he probably wouldn't get fired for it. Either way it's his decision to make as long as you don't fly with him you are cool. And my personal favorite question. "What would you do if you agreed to have dinner with the captain and when you meet him in the lobby he's wearing a dress?" It doesn't really matter how you answer this question as long as your first instinct isn't to call the chief pilot's office or beat him up. He's not breaking any company policy or FAR, so who cares?
Think up stories in advance. A lot of questions start with "tell me about a time". This is not a good time to try to remember what happened and fumble your way through a story. You'll end up just trying to remember the details and ignore the lesson learned. Keep your stories (answers in general) short. One to two minutes, any longer is just boring.
If you don't know the answer to a question say you don't know. Don't make something up or sit there for five minutes trying to come up with an answer. Think about the question for about thirty seconds and if you can't come up with an answer by then just admit that you don't know and would look it up if you needed to know it.
It's possible that you have all the right answers but still don't get hired because of bad body language. Smile (until it hurts). Make sure you introduce yourself to the receptionist (believe it or not they may ask the receptionist how you acted). Do your absolute best to remember the names of the people who interview you, so at the end you can say "thanks Mike, thanks Todd you have really made this an enjoyable experience" (even if it wasn't, it's okay to lie here

). When you are answering questions look at whoever is in the room. The HR person probably doesn't know what a magneto is but I can gaurentee that they can answer nearly every technical quesiton that is asked, simply because they hear it all the time. Make sure you have something to do with your hands, I have a black vinal notebook that I hold onto when I interview so I don't feel awkward (plus I can write the names of my interviewers in it). If you are not sure what your body language is telling the interviewer get a list of questions and have someone interview you while videotaping it. It sounds silly, but if you are doing something obvious you will be able to correct it before your next interview.
Anyway, sorry for the unsolicited rant. I hope it helps. Good luck.