The key when answering a question is to find a common ground. You don't want your answer to be too long because you will start to ramble (remember the time limit!). If you use too much time answering one question, your interview may be cut short and you will not have enough time to answer all of the other questions. On the other hand, you don't want your answer to be so short that you don't get your point across.
There are no ground rules for answering questions. You have to say what feels natural to you. However, there is one area that created several problems for me when I was a rater. (And remember this is only my opinion; I don't really know how other raters feel about these types of answers).
Oftentimes a panel of raters will ask a question similar to this: "If we don't choose you for this position, which candidate should we choose?"
Think about what you would say in a situation like this. How would you answer the panel? If you put down your competitors, you'll sound conceited. How are you going to feel about yourself when you tell the board that your friends competing against you are not as good as you? Or, on the other hand, maybe they are as good as you and to be a good friend you should tell the board how really great your friend is and they should get the position if you were not chosen. This is an interesting quandary.
There was once a lieutenant, along with other members of the same department, testing for a chief's position. Naturally, this was an open test and officers from other agencies were also testing. Now this lieutenant wanted the new chief to come from within his department, so when he was asked the question, "If we don't choose you for the position, which candidate should we choose?" he immediately stated something to the effect of "Gentlemen, if you don't select me for this position, then the only person to hold the chief of police position for this department is Captain so & so!" Now, he did not stop there; he continued to extol this person's virtues and how it would be a great mistake for the board to go outside the department and not pick this captain. He was quite pleased with himself when he left the room and even boasted to other officers how he told the board whom to choose. To answer your obvious question, neither he nor the other individual was selected. Rather, the board chose a captain from an outside agency.
If you were to give an answer similar to the above, that you feel someone else is really qualified for this position, it would appear to me that you have very little confidence in yourself or your abilities. It also demonstrates that you feel the other candidates are better than you and they should get the position, which often occurs.