As an interviewer asking for white board coding, I wasn't looking for perfect syntax and I was asking questions about basic algorithms using arrays or strings. I was looking for the kind of knowledge a college kid should have after watching a professor write code on a chalkboard. Not that most professors do that any more, since they all use PowerPoint, but back in the day I promise they did.
Whiteboarding code did seem to freak some of my interviewees out, but in that case I tended to try and talk them through it. All I wanted to see was that they could write code. Since my company didn't take code samples, and since I wasn't the hiring manager dictating how the interview went, this was my best bet for getting that information.
As an interviewee I was interviewed by a Very Big Company whose technical interviews are all whiteboard. I had read on blogs and in articles that for this Very Big Company you had to start off with a moderately optimized answer as opposed to the brute force attack and you had to have perfect syntax. The people writing this on the internet must have gotten the though interviewers and I must have gotten the easy ones, because my experience was that the whiteboard coding was viewed as a thinking tool in the interviews just as it would be in real brainstorming with your team.
Perhaps there are interviewers out there who demand perfect and at least somewhat optimized code on the whiteboard as if it was flowing straight from your stream of consciousness. Really, though, if a person is demanding such things do you want him or her as your co-worker? If so, great. If not, perhaps it isn't so bad if you can't write code like prose.
I wouldn't freak out about writing code on a whiteboard in an interview, though. Just do your best to solve the problem with the tools you have. Interviewers like me are rooting for you to solve the problem as much as you are.