It varies dramatically from state to state. In Maryland, my car flunked for things like having a few drops of condensation in a headlight, a burned out foglight (nevermind that most cars don't have fogs and you're not supposed to use them in normal driving anyway!), and a serpentine belt that was perfectly fine but the idiot mechanic claimed was dry rotted.
When I moved to Florida, I found that the "inspection" consisted of a DMV guy walking out and making sure the VIN number on the car matched the one I put on the papers. I love the south.
