I forget the name, but when performing tests there's a desire to capture all of the relevant information and no irrelevant information. It's sort of like false positives vs false negatives, but I think what I'm really trying to get at is the idea that unless a test produces entirely random results, it's ultimately sorting people somehow. The question is "how much does that 'how' relate to programming potential?"

In the case of this test, I'd say it probably has a weak correlation with programming ability, and a stronger one for general reasoning ability.

I think this test is kind of backwards: it figures out if you can follow instructions, not if you can take a process you understand and turn it into instructions (i.e. an algorithm). Although I suppose the following-instructions part is a necessary prereq for the creation part. At the very least, I think you'll want to test the algorithm creation skill too. Then, if following is a prereq, you don't need to bother testing for it any more, as anyone who would have failed there will also be screened by the creation step.

(I'm a professional software engineer, sometimes)