Last night, Kristin Cavallari went on Watch What Happens Live (to promote her shoe line? because she has one?) and played the customary game "Plead the Fifth," during which she was asked, "How fake was The Hills?" Her answer: "Pretty fake." She admitted that producers told the cast what to say and that fights and even some of the relationships were faked for the show. Including her "romance" with Justin Bobby. When host Andy Cohen pointed out that she made out with Justin Bobby on camera, Kristin said, "It took a lot of convincing," presumably from producers. So it was basically like Curb Your Enthusiasm, where they were given a story arc and then improved their scenes.
The public was already pretty much aware that the show was staged, especially given the tongue-in-cheek series finale in which Kristin says goodbye forever to Brody Jenner, only for the camera to pan away and reveal that they were actually on a film set. Also, Lauren Conrad has been open about staged aspects of the show, telling the ladies of The View about an infamous phone call between her and Spencer Pratt: she was on the phone with someone else, and his voice was dubbed in post production.
But it wasn't until Kristin's admissions last night that we could fully understand the scope of the fakery. On the After Show, she also talked about how the cast was required to play out their fake story lines in the tabloids, which she said was difficult for her. (Probably because her story line was about a coke addiction.)