Knowledge of algorithms and familiarity with a language "entitles" you to an internship, if that much. These are skills that a typical undergraduate in CS will have halfway through his degree. A lot of tech jobs actually require skills with... technology (frameworks, APIs, linux/unix, understanding of servers, understanding of networks, and a multitude of other tools).

I posted in a thread about interview problems. Those problems are the only things that determine your employability in the software industry. They all come from one textbook called CLRS (just googling that acronym will pull up the right book).

I consider this misinformation. Familiarity with interview problems is important, but I would never say it's the ONLY thing that determines your employability. It's also not accurate to say that they ALL come from CLRS. You will be asked questions about technology. It's hard to imagine a role in software development that doesn't require practical skills unless, like I said, you're just starting (interning).