There are two problems with this function.

1. It uses vc-backend on the default-directory, which in turn uses
vc-registered.  But the return value of this function for directories
seems to be back end dependent.  E.g. in git it returns always nil for
directories, in bzr it seems to return t only if directory does not end
with a slash.  I am not sure which of these things needs to be fixed.
I suppose this function should do what it says and return t for
registered files (including directories).  But vc-ignore should also
work in the root directory, which technically is not registered.  So I
replaced it with vc-responsible-backend.

2. The interactive spec, when reading the documentation, makes no sense
to me.  I assume this is just an oversight.

3. The function should not have different abilities depending on whether
it was called interactively or not.

-ap