As an example, in one big company I worked at, I was very far down the totem-pole, but in a senior technical role. I had, however, firmly established my reputation for honesty (sometimes brutal honesty) and integrity. While some of the managers a few steps above me did not care for me because of this, my direct supervisor respected it, and I was meeting for lunch weekly with the SVP of our business unit to answer any questions he had about the internals of the product and give him "straight answers" about things he had asked about. Sure, in some ways, I was probably backstabbing the guys above me, but only because they were lying to the SVP constantly and that impacted his ability to make good decisions.

Honesty is pretty much always the best policy, no matter who asks. It won't always win you favors, but at least no matter the outcome you can be assured of your own personal integrity. Being dishonest when it seems advantageous may prevent some heartache, but it won't prevent all heartache, and you'll end up seeing yourself as a bad person in the end and have a troubled conscience (unless of course you're a psychopath).