Best Practice for Errors in RESTful API

Question

What are the best practices for returning HTTP status codes in RESTful API? I am using Laravel 4 for my PHP framework.

In the case of an error, should I use

Answer 1

I wouldn't use 200 status for everything. That just would be confusing.

Jquery allows you to process different response codes differently, there are built in methods for that already so take advantage of using them in your apps and when your app grows you can provide that API for others to use too.

Edit: Also I highly recommend watching this talk about Laravel and API development:

http://kuzemchak.net/blog/entry/laracon-slides-and-video