There are two kinds of errors. False positives and false negatives. If the false positive rate was 1/100, would you feel comfortable using it as the whole trial? I wouldn't! In a complex case you can interview way more than 100 people, and you'd certainly wind up going down the wrong trail.
1 error in a hundred is ground for an warrant, not material for trial. I would tolerate error rates in the 1 in 1,000 to 1 in 10,000 for minor crimes where the only penalty is a fine. I would want something on the order of 1 in 100,000 before it was considered evidence in a criminal case, and something more then 1 in 1,000,000 before I would consider convicting on any one peice of evidence.
But there are a lot of subtle factors, such as how many errors are false positives and false negatives. Can the device give us any indication of how sure it is a particular statement is true? How does asking the same question again effect things? How does self deception register on the device? How do unclear memories register? Can it pick up on technicly correct but intentionally evasive answers?
Alternately suppose that over the time between the event and the trial I have convinced myself of a lie. See false memory syndrome. Many of those "abuse victims" would have passed any test for whether they were lying. They were telling things as they remember them. There is no discernable difference between a false memory and a real one. (Other than the fact that one didn't really happen.)
You are correct, this would not stop all cases. But clearing the backlog of cases where the guilty party can be forced to admit it, would let the courts concentrate on the cases where guilt isn't so clear.
If the device is reliable enough, it's existance would be enough to keep a lot of cases out of court. The vast majority of all guilty parties are well aware of it, and would admit guilt or take a plea rather then go to court.
Just think what such a device would do to SCO's suit. They wouldn't dare bring such a suit if there was a risk the CEO could be put on the stand and forced to admit the goal was to extort money out of companies. And what about things like the OJ case, where the wealthy can buy a huge advantage in court.
Jay