The witches greet Macbeth as thane of Glamis, thane of Cawdor, and “king hereafter.” He is surprised, for while he is the thane of Glamis, he does not (yet) hold the title thane of Cawdor, and he certainly is not king. Banquo asks for a prophecy of his own, and the witches tell him the following: that he is “lesser than Macbeth, and greater,” that he is “not so happy, yet much happier,” and that he shall be the father of kings.

After the witches vanish, Ross and Angus enter with the news that Duncan has named Macbeth thane of Cawdor. Banquo and Macbeth look at each other in shock. One of the prophecies has already come true. But Banquo is suspicious, and herein lies his warning. He tells Macbeth that he may indeed get the crown, but he thinks the whole thing is strange, and he knows that sometimes evil spirits will tell a few truths only to lead people into deeper lies and to betray them to evil in the end. He wonders if the witches are these “instruments of darkness” sent to lead Macbeth to a bad end. Not too much more time passes before Banquo's concern turns out to be valid, and Macbeth betrays the king, his friend, and in the end, himself.

In act 1, scene 3, Macbeth and Banquo have just finished fighting in battle on two fronts. First, they put down the rebellion led by Macdonwald, a Scots traitor, and, second, they fought the Norwegian soldiers who have invaded the country. After these battles, the exhausted but victorious leaders are walking across the heath, returning to their king to report on their victories. There, they are met by the three Weird Sisters who tell Macbeth that he will be thane of Cawdor and, later, king of Scotland; they also tell Banquo that he will father kings. Shortly after this meeting ends, Macbeth and Banquo meet with Ross and Angus, who tell Macbeth that he has been named thane of Cawdor by the king. This naming, of course, has already taken place in an earlier scene, when Duncan dispatched Ross and Angus with the news, but Macbeth is only just now learning about it, and so it appears that the Weird Sisters have predicted the future accurately.

Once Macbeth and Banquo hear this news of Macbeth’s new title, Macbeth asks Banquo,

Do you not hope your children shall be kings,
When those that gave the Thane of Cawdor to me
Promised no less to them?

Thus, it seems fairly clear that Macbeth believes what the Weird Sisters have seemed to predict. Banquo is somewhat less credulous, speaking the lines you cite. In these lines, he suggests that evil beings might tell us small truths in order to trick us when it comes to something more significant. He wonders about the witches' motives and if they have said one true thing in order to trick the men into believing the other, bigger, “predictions” they’ve made. Banquo is a great deal less inclined to trust and believe than Macbeth is, emphasizing one significant difference between their characters.

In Act I, Scene 3, Macbeth and Banquo are traveling home from the battle when they run into The Three Witches, who prophesy that Macbeth will become Thane of Cawdor and future king. Macbeth is astonished. The Three Witches then tell Banquo that, although he will not be king, his descendants will reign as kings. Before answering Macbeth's final question, The Three Witches disappear.

Shortly after receiving the prophecy, Macbeth is informed that he has been named Thane of Cawdor because the former Thane has been sentenced to death. Macbeth suddenly realizes that The Three Witches' predictions were correct, and he contemplates how to become king. Macbeth then questions Banquo and asks if he is also excited about the prophecy that his descendants will become kings. Banquo is not so enthused, and questions the motives of The Three Witches. He says,

But 'tis strange and oftentimes, to win us to our harm, the instruments of darkness tell us truths, win us with honest trifles, to betray's in deepest consequence (Act I, Scene 3, lines 124-28).

Banquo explains to Macbeth that sometimes agents of evil earn people's trust by telling them the truth, which will eventually lead to their self-destruction. Banquo's comment foreshadows Macbeth's fatal decision to commit regicide in order to become king.

When Macbeth and Banquo travel home from battle they pass through the forest and travel across a patch of barren land.  As they pass through this patch of land, they are approached by the three witches or weird sisters. The weird sisters then deliver the prophecies to Macbeth and Banquo, telling them that Macbeth will be the Thane of Cawdor and eventually King of Scotland and that Banquo will father a line of kings.  Once the witches disappear, a pair of Scottish nobles approach and deliver the news that Macbeth has been named Thane of Cawdor by King Duncan.  In considering this news and the impact it has on their understanding of the witches' prophecies, Banquo declares:  

But 'tis strange And oftentimes, to win us to our harm,/ The instruments of darkness tell us truths,/ Win us with honest trifles, to betray's/ In deepest consequence.

In saying this, Banquo conveys his skepticism towards the witches' prophecy and ultimately declares that at times dark forces may try to sway us with simple truths only in order to deliver upon us dire consequences.  This is in direct contrast to Macbeth who accepts the predictions made by the witches without much question.