The importance of honesty in design:
Beyond the obvious concerns of conflict of interest or complying with nondisclosure agreements, you have to be honest about your capabilities and your expectations - first with yourself, and then with clients and colleagues. The consequences of deceiving yourself or your partners in the effort, whatever that effort may be, can be quite serious. The professional, financial, legal, and personal costs are worth taking some care to avoid. Be able to assure yourself that every decision you make was made because it was the right thing to do - it's too easy to talk yourself into spending time (yours and the user's) and the client's money on an unnecessary feature that you personally liked or wanted experience with. Did you do it because it was right for this product at this time, or did you do it just because you could?
Perception, rightly or wrongly, is also a factor under this topic. Does your work seem honest? Designs that are unnecessarily complex give the impression that the designer is trying to conceal something - incompetence, perhaps. Conversely, a clean, simple approach is reassuring to both the user and the client - as well as being more effective. They should never wonder if what they're seeing is really what they're getting. Your work and your approach to the work should be simple and straightforward.