There can still be mandatory passport checks at internal borders even with Schengen. This is a while ago, but back in 2001 I crossed the border from France to Italy a few days before the G8 summit in Genoa [0]. Passport checked, questions asked about itinerary, and a French couple on a motor bike was turned back due to not carrying their passports.

On the other hand, that is the only time of quite a few crossing where this have happened.

[0] http://en.wikipedia.org/wiki/27th_G8_summit