Generally I told people that I had done a tiny bit of contract work (true) and had been working on my own project (somewhat true, although it never got past the conceptual stage). There were a couple other things, which I won't elaborate on for anonymity's sake, but they were not programming related at all. Even on the projects, interviewers never really dug deep into them.

I suppose sleep and videogames aren't great answers. Taking time off to travel or explore some other interest is almost certainly fine in SV.

Ultimately, I think most places are so hard up to find qualified candidates that as long as you pass the interview and don't come off as a total slacker, you're probably fine. But if you're career-minded and applying to a place that has their career tracks worked out (read, not most startups), you probably want to give that impression to your future engineering manager.