My experience of students I'd pretty much start from scratch - I've found what people learn at University and what is useful are two pretty separate sets.
But as you have the chance to speak to them it would be silly not to take it.
My assumption is that there is little commonality in their background so I'm avoiding language specific questions. The one exception I've made to this is an assumption that they've done something on the web but this question could be subbed for something equivalent if they're embedded specialists or whatever.
You've asked for them to be progressive which I've sort of tried to do but if my assumption about no commonality is correct right / wrong questions are relatively tricky and a lot of their competence will come from how good their answers to more general questions are.
1) What languages and technologies have you been exposed to? How many of these (and which ones) have you spent more than 50 hours actually programming (that is not including lectures, lab time and so on but including projects and assignments where you were coding solo).
2) Describe the most complex program you've ever written. What made it complex?
3) What were you taught at university (relating to programming) that you really don't think you understand properly? If you think that you understood everything (check their grades at this point) then talk about an application or an element of an application that you've seen that you wouldn't know how to code and how you might start thinking about it.
4) What are the basic tenets of Object Oriented Programming?
5) Tell me as much about relational databases as you can in 1 minute
6) For a web application describe a method for maintaining information about the user between pages. What advantages and disadvantages exist for the mechanism you've described.
7) Pick an piece of commonly used functionality within computing and explain to be very briefly how it works at a programmatic level (e.g. encryption, compression). Also explain how you had to use that functionality you'd implement it (here I'd be looking for the fact that although you may know how something works, it's probably better to grab a library for it).
EDIT: Restructured and added a couple of extra questions to make it more progressive as originally asked.