Things to focus on in a model lesson

Having done this, I'd advise:

• Take it really seriously. In places where candidates are judged equally on teaching and research, the model lesson could really make the difference. Strong researchers may neglect it, relying on their publication/citation record.
• Make sure you prepare for the expected audience (in my case, 1st year students), not the actual audience (academics).
• Feel free to use techniques you would use in a classroom, but then use "time jumps" to indicate that the activity has taken place. The problem with this is that if you have follow up questions, there may be no answers and the lecture may fall flat.
• Don't forget "learning objectives" and "lecture structure" up front, and other guidelines for students throughout (though you probably can only show one such thing).
• Practice more than you would practice for an actual lecture.
• No corny jokes. If you cannot tell whether a joke is corny, then assume it is. In fact, beware of jokes. Relying on natural humour is probably better.

I participated to this kind of interviews, as an applicant as well as a committe member. For the exemple, I will assume that you are applying to a position as a maths teacher.

• As Dave Clarke mentioned, prepare for the expected audience. If your are expected to teach to maths major in a very good institution, it is not a big problem to show off your skills by lecturing at a level a little bit above the expected audience's level. But avoid this if your expected audience is notoriously weak or non maths majors. I got rejected once because I was "too good" for the position.
• To prepare the lecture, you should study the curriculum of the institution you will be teaching. You usually can find it on the institution's website. It is important since it helps you to do the lecture at right level, but also helps you to connect your lecture to other topics (especially when your expected students are not maths major) studied by your future students. It will make you more comfortable for the questions that usually follow the interview.
• Only do things you usually do in class. An interview is definitely not the place to experiment a new teaching method. Last month, a candidate with an impressive CV failed an interview in my institution by trying to use a computer and videoprojector, thing he obviously never did before. The result was pityful.
• Make sure your connect the lecture to the lectures sequence of a real course. So, take time to tell what students should have studied in the previous lectures, and which problems (related to the current lecture) they will solve in future lectures. This is something you probably already do in a normal lecture, but it is especially important here since the committee wants to know if you can organize a complete course.
• But putting your lecture in context does not mean reviewing the (expected) previous lecture, you have no time for being off-topic.
• I would not prepare a joke, as if it was a stand-up comedy. But, if an opportunity to make a joke, I would take it in order to make a more decontracted atmosphere. Beside hiring the best teacher, the committee wants to hire someone who they feel comfortable to work with. To sum up, your goal is to appear as a reliable, professional, open-minded and with team spirit person.
• Even if I do it in class, I would not prepare any activity where the audience participates -or only a very short one-, since it takes too much time (except for a foreign language teacher interview). But I would try to interact as much as I can with the audience through questions.