H.W.
Around four our son started with the smaller, wishful thinking untruths. The lies have become more about covering his butt, now. We are using the tactic discussed in Nurtureshock, where we tell him how much telling the truth pleases us and how happy it makes us when he's honest-- even if we aren't happy with what he did or what he's telling us, we are glad he told us the truth. When the lie comes up around misbehavior, he knows that if he tells us the truth before we discover it ourselves, we just deal with the misbehavior; if he lies to us about it, then we have to make amends for the misbehavior and we lose a 'trust' type privilege. (That's only happened a few times, thankfully.)
We always want him to know that it will ALWAYS be better to tell the truth and accept the consequence of making amends than it is to lie about it.