In all serious interactions the truth works, yeah.
When you're with your friends, it's sometimes funny to make something up that's so blatantly over the top ridiculous it is obviously a lie, then keep it up. For example, my claim that I'd spent the weekend defending a village from fire ants in Antigua... To this day I still insist that's what I was doing. Stupid I know, but what you can do with friends you can't do with acquaintances or strangers.
I'd also throw in the idea that slightly bending the truth with a story to make it better, funnier, cooler is also acceptable, so long as you're not changing the big picture at all or making anyone else look bad. I'll often throw in a little detail into a story that didn't happen but makes it much funnier. I don't feel bad about this, because it's unimportant and has helped to entertain people.
I had a friend who told a little white lie when drunk, which eventually snowballed out of control into some massively amazing live-altering story because he kept adding to it whenever he'd had a few beers. He ended up having to tell everyone he knew that he was making it up all along. It was funny when we found out, but a bit stupid.