When interviewing UI/UX jobs, some companies would give you design problems for you to work at home and return in prototypes in a couple days. What are the most common tools/medium used? Balsamiq, PDF, or some online prototyping services? One specific question I have is do people add notes on the sides of their screens to explain their design decisions? Would it be a plus or would it mess up the design (having arrows pointing to the components you are describing)?
Honestly, it depends on if it's UI or UX. Interfaces are going to be more visual, and may require you to produce a more mid-fidelity prototype such as you would on Balsamiq, Moqups, or Froont.
On the flip-side, if you're interviewing for UX, notes and scribbles may be more important to help describe your actions. Of course, some of those tools would still be useful in some cases, but that can be evaluated based on the project you are given.
And finally, in any case I would say do what you're most comfortable with. If you convey ideas efficiently and fast with sketches, go for it. But if you can produce quality visuals in a decent amount of time, then go for gold with your preferred prototyping tool. Or do both. Start with sketches to show, and then show your visual mockup.
Speaking as somebody who occasionally sits on the interviewing side of the table I would not care at all what tool you chose to use. Balsamiq. Sketches on paper. Keynote. Whatever.
What I would care about was that you could explain the design decisions to me, and that the deliverable does the job intended.
If your not sure what kind of artefact and for what purpose then ask (if it was me on the interviewer side you would get points for asking — since understanding what you need deliver and why is part of your job).