[ssylee]

From my experience in a similar situation, employers definitely do prefer to consider candidates who are either working in a job already, or have the opportunity to attract multiple concurrent offers. Think about it like the lone attractive lady in a bar.

In terms of interviewing, if you decide to go with looking for a different job while you still have a job, try to batch together your interviews on a given vacation period, or arrange for interviews to happen at alternative times of the day. As derekja said, decent developers are rarely at risk of starving. However, the HR department usually don't have the ability to tell whether you're a decent developer or not. You will have to pass through the HR filter especially if your network isn't very well-established (which I would presume to be the case for your average college graduate). After you quit, the longer you're out of work, the less likely you'll be able to land a replacement gig before you get desperate and cycle back to the same pattern again.

So at the end of the day, I feel you need to make your decision based on how tolerable you are about the situation (related to how bad the situation progressed).