I'm 43 and have been a programmer in Silicon Valley since 1995. From my personal perspective, the job market is red hot. However, having experienced countless interviews, from both sides of the table, I know how arbitrary and capricious hiring decisions are. I've worked at a lot of places and always kept my skill-set relevant, but if, for example, I had spent the last 12 years doing nothing but C++ for one employer, and suddenly found myself looking for work, I'm sure my age would be a liability.
One thing I've noticed from recent experience interviewing candidates: mediocre interviewees with only a few years experience often get the benefit of the doubt, where people with 10 or more years experience who give an equally mediocre interview performance will get rejected outright. The rationale is that the junior person is likely to improve, whereas with the senior person, "what you see is what you get". Is this unfair? I don't know, I guess it depends on the situation, but it certainly illustrates the fact that as an interviewee, you are judged according to significantly varying standards depending on your age. This, by definition, is "discrimination".

I agree 100%, and would add that this can even happen with good programmers. A few years ago I worked at a company whose culture was deeply invested in the XP "comments are a code smell" philosophy. The engineers were all extremely bright, but as a newcomer I found the code to be difficult to work with, in part because there were no comments anywhere. No API docs, no explanations of hacky code (there was plenty of hacky code, by the way), no nothing.
The idea was that 1) if code is not clear without comments, it should be rewritten to make it more simple, and 2) if you need help understanding someone's code, just walk over and ask him/her about it. Well, regarding 1), I was trying to maintain/improve some nasty code which had been touched by multiple people over several years and it didn't seem like its lack of comments had led to any kind of refactoring or simplification. And regarding 2), the company now no longer exists, and while the IP now belongs to another company, all of the original engineers have moved on to bigger and better places. I bet the people who had to take over the code would not have minded the additional "smell" of a few well-placed comments. :-)