In a discussion with an older lawyer, I was told that dressing well demonstrates your respect for the people you are meeting with. I personally feel that things have become more complicated as dress, in general, has become more casual but I'm not certain where the line lies between dressing down and disrespect.
I've always worn a suit to interviews in the Midwest and East Coast. Once in New York (at a startup) I was told after being hired that they were concerned that I might be too stiff and strait-laced because of the suit. I did get the job, however, and I would still wear a suit interviewing there.
On the West Coast, I might go with a suit for big companies, but I'd go button down and khakis for a small company or a startup. It's a different culture. Even the better restaurants rarely require formal attire, and I feel like a suit at some interviews would show an inability to grasp the cultural differences.