FWIW, I just took the revised 70-290 MCSE 2003 core exam and got half a dozen simulations that force you to go through all the motions. The rest was still multiple choice but it's definitely much harder to pass without some "hands-on" experience now.
Anyway, that's same reason I think taking the class(es) for RHCE might be better, just to get that hands-on lab experience. Sure, if you have spare equipment handy I suppose you could build your own lab environment with CentOS or White Box or something like that, but for most people that's a lot of effort, myself included.