A BE20 Captain briefed his First Officer in depth about the TEB RUUDY THREE 1;500 FT restriction and yet after inflight verbal reminders; the First Officer momentarily leveled at 1;500 FT; then continued the climb before descending again.

Narrative

I had asked the multi-engine rated Commercial Flight Instructor pilot to climb to 1;500 FT MSL on heading of 240 until intercepting the 260 bearing to the WENTZ intersection. I advised that he needed to just climb runway heading to 1;500 FT MSL and stop climb. I advised that I would give him heading to intercept the 260 bearing to WENTZ. I repeated this direction multiple times prior to engine start as I thought it safer for him to fly and me navigate; but I knew that it would be a challenge to do both in the King Air. After normal takeoff; I advised to start the level off as we went through 1;200 FT MSL. As we reached 1;500 FT MSL; I noticed that he was level. I looked back at departure procedure and advised turn right heading 260 to WENTZ. When I looked back at altitude; he was climbing through 1;600 FT. I advised go back to 1;500 FT and started pushing on yoke. We climbed through 1;680 FT on the altimeter before descending back to 1;500 FT MSL. ATC called and advised that we were required to be at 1;500 FT over WENTZ. I responded; 'Roger; 1;500 FT;' and we leveled off at 1;500 FT. No further comments were made regarding the issue.