Live Interlocking Objects

Using the Live Paint Bucket (K), you can easily create interlocking objects that remain live. Create two overlapping objects that have outlined paths (Object>Path>Outline Stroke), select them both, and click on the selected objects with the Live Paint Bucket to turn them into a Live Paint Object. Pick the color of one of the objects and click again with the Live Paint Bucket tool where the objects overlap. Now you can use the Direct Selection tool (A) to reposition either object while keeping the interlocking look.