Good questions Shifter.  Having placed hundreds of engineers over my career I can share with you my thoughts and comments on this topic.  As far as discussing compensation, if it is asked during the course of the interview, then by all means share that information with the employer, and be honest.  Make sure you go into the interview with a full understanding of your compensation plan.  That being base salary, any overtime pay, bonus, profit sharing, 401K matching, car allowance, cell phone, etc.   This way everything is out on the table up front. 

When interviewing you should also take a step back and look at your accomplishments and be very aware of what you can bring to the table:

Take a look at how many people you are supervising; take a look at how much business was directly related to you going out and winning; take a look at how much of your time is billable to the client vs. what is overhead; take a look at the hours that you work above and beyond the forty hour work week that you are not directly compensated for; take a look at what clients you can bring with you to another company; understand the definition of what your title is vs. what your title is at the company you are interviewing with, as the responsibilities that are tied to the same titles but at a different company can vary tremendously. 

These are just some of the issues that you should have a full understanding of before entering negotiations.  Understanding these issues should put you in a position to receive a "premium" offer.  That being said, you need to also understand what your peers are making (REALLY making vs. what they may tell you they are making), and you need to have a good grip on the market conditions.   

This is a noteworthy topic Shifter and is worthy of a more detailed discussion on the blog...I will post something on this later this week.