I have a friend who claims that you can leave the Schengen area for 1 night, and re-enter, to reset your 90 days. For example, an Australian could enter Europe and then go for a couple of nights holiday to Morocco, Andorra, or London (any place outside of Schengen), and then return to Paris and have the passport stamped for another 90 days stay in Europe. They swear by this and claim they know guys doing it for years. My understanding, which admittedly is just from reading online and not real-world experience, was that we could only spend 90 days out of any 180 days in the Schengen region.
I've also heard other people say, no, you can't do that and if you are caught overstaying then you can be banned from re-entering schengen region for 5 years. But, I've heard similar stories from several other people about leaving for 1 night making me think there is something to this story even if it's a loophole or a legal grey area (e.g. maybe the person checking at the border when you re-enter has to actually notice a previous stamp in your passport?)
So what are the real rules and facts about tourists staying in the Schengen region on these visa waiver agreements?