A Hoax ?
Not from where I was sitting at the time !
Setting the time to 12/31/1999 11:59 on an unpatched system would cause all kinds of chaos, I was heavily involved in preventing the chaos that unpatched legacy systems would have caused, and I can tell you that had we (the company I was working for at the time) not started preparing in 1997, there would have been an awfull lot of public utility companies with serious problems.
I admit that much of the fever that was induced - ie you microwave oven might explode etc, was as a result of public and press mis-understandings, and in part frustration of 'techs' trying to get the message accross to people that that was a potentially huge issue.
I only had a couple of customers that where stopped in their tracks, one was an engineering company that was unable to bill anyone, because the ledger system could not age invoices that where produced prior to 1/1/2000 correctly - assuming that all invoices produced in '99 where actually negative 99 years old, and therefore not due for a while !
The second company simply could not operate its CAM systems, because it assumed that all of the drawings where beyond their expiration data.
There where many other examples that I heard of, but mostly it was nailed dues to reasonably forward thinking, and a lot of testing.
Oh - and some older machines could not cope with a date in 2000 at all, as they had never been designed to last for 20 years, and the authors of the bios's had long ago retired, so some patches where produced with varying results....