This is from the Game WISH page:

Have you ever played with someone who cheated? (Fudging dice rolls or implying greater powers than they really had, or some other abuse of in-game trust…) How did you handle it? How would you recommend it be handled?

Oh, yeah, all the time.  In fact, I cheat.

Who doesn't keep re-rolling stats until they're all above 10?  Is it just me?  Or are my gaming friends so extraordinarily lucky that they only need to roll once to get four 18s in their six stats?  If that's the case then I should cheat.  Wait a minute...  Maybe they're all cheating, too!

The real interesting question here would be, "Does your GM cheat?"  And of course the answer should be an emphatic, "Damn right!"  I will use food processors in unfortunate ways before I'll let a game's fate be entirely dictated by dice and not the actions of players or the story.

But I guess that this question is more along the lines of, "Have you played with someone who cheated egregiously?"  And to that I also answer yes.  Actually, I'm not sure, but I suspect that I do.  A few of the group suspects that this is going on, but we don't do anything about it because, well, cheating dice rolls is pretty harmless.  It's not interesting, but it's harmless.

Here's an example of what I mean:

Did you succeed at that saving throw?  (Roll...  Ack!  A One!)  You did?  Ok, then we move on...

or:

Did you succeed at that saving throw?  (Roll...  Ack!  A One!)  No?  Bwah-hah-hah!  The first thing that happens is your backpack catches on fire.  This is bad because you had picked up all of those unidentified potions, remember?...

Which do you like better?  And any GM worth anything isn't going to let your character die because you made a lousy roll in a fight you should be winning.  There are always consequences that allow for the avoidance of death (perhaps not torture or later suffering, but I digress).

(Here is perhaps a good place to note System DL yet again, a system that is diceless, making it kind of hard to cheat on a die roll.  But the system is also interesting because it lets you harvest potential important successes by offering yourself up for interesting, plot-driving failures.  Check it out!)

There has never really been a clear incident of someone cheating intentionally, as far as I know.  I mean, we all try to pull off a little cheese now and then, but everyone has their schticks and we all know what we can get away with.  Some of it we've come to accept as house rules.  Besides those, an extra d4 or 2d4 in a magic missile or a fudged saving throw probably isn't going to upset the fates, and may even be good for moving play along.

How many times has your game lagged because someone rolled poorly and you had to put the dungeon on hold just to drag his paralyzed carcass back to the temple so he could be observed and prayed over for two weeks, giving your enemies enough time to fortify the fortress with even nastier beasts.  Just say you rolled a 12 instead of an 11 for crying out loud!  (Or in following with my upcoming "The GM needs common sense" tirade, don't completely paralyze the player when he fails the roll so he'll be more likely to tell you when he fails.  Or better yet, delay the paralyzation until a crucial moment later in the session!  Yes, I am pure evil!  But darn interesting, no?)

One thing I do notice (and I was reading about this instance I think over at Arref's site) is this concept he talks about of attempting to "retcon" a situation.  But I don't think it's usually that bad.

In a recent combat with our group we had locked ourselves in a room in a dungeon with only one exit, a wooden door.  The GM, attempting to make an exciting entrance with his NPC foes, bashed in the door and started positioning minis on the table inside the pre-drawn room area.  The player of our fighter-ish Troll PC said that this bashing in would be tough since he was going to sleep with his back leaning against the door.  While I don't recall him mentioning this, it's certainly possible and I'm definitely not going to call him a liar.

So we back up a bit.

The combat now begins with the raiding drow (man, how I hate drow) shooting a couple of bolts of lightning through the door, hopefully to dislodge whatever it is that was blocking the door.  So who's cheating now?  Are we better off with a half-fried Troll or with the drow baddies in the room with us?

I think blame falls mostly on the GM here anyway (not personally in this situation, but generally), because he should ask the players to at least describe their positions around the combat area before combat begins.  Conversely, simply suggesting an impending combat may tip the GM's hand.  And then are we to suggest the laborious and cliche, "Do it every time, even if there's no combat?"  Or the equally dull, "Make them roll at random intervals for no reason just to keep them on their toes?"  These seem like cheap ploys that are ripe for more attempts at player cheating.

So my vote is to let the players cheat when it comes to dice.  Let them cheat when they ready for combat.  The GM can cheat just as well or better.  Cheating only benefits the player if the GM kills PCs solely based on the chaotic nature of dice.  If that's the case, I suggest getting big enough dice that the numbers can be seen across the game table, then wing them at the GM and tell him to ditch the miniature wargame attitude and wake up to the fundamentals of roleplaying.