I heard that about the nursing program at my school, too. (I wonder if we go to the same school?) I know how discouraging its been for a lot of people because quite a few gave up and dropped out. But, there's two ways of looking at the situation:
From what I've heard, some nursing schools structure their program around knowledge and they test students based on how well they retain the texbook stuff. Other schools structure their program around critical thinking, and they couldn't care any less about textbook descriptions of the nursing process. I'm in a program that follows the latter format, and I was very surprised at most of the questions that came up on the tests. Sometimes, all the options in the multiple choice are correct, but you have to choose the one that is the MOST correct, and it can get pretty confusing. They're more interested to know that can apply knowledge to a critical real life situation rather than how well you can remember definitions and normals.
My personal opinion is that the critical thinking approach is better for nursing students in the long run because it is the format that is used in the NCLEX exam. The trick is knowing how to interpret these type of nursing questions. I recommend Test Success by Nugent. You can buy it used dirt cheap on e-bay or half.com, and its well worth getting because it has some pretty good tips and rationales on how to interpret these types of questions and it shows you all the tricks and distractors to look out for. If it wasn't for this book I doubt I would have passed my first nursing course.