Signup Form Do's and Dont's
Member signup forms are a lot like job interviews. You've only got one shot, so don't screw it up! Signup forms are the gateways to new worlds; they are the proverbial Ellis Island of social networks. Because it is the very first interaction a new user has with your site, it is absolutely crucial to make the experience as intuitive and hassle-free as possible.
Launching a new Web 2.0 site can feel a lot like those interviews with 20 other people sitting in the lobby vying for the same position. To thrash your competition and get that job, you have to make yourself easy to hire. And if you're reading this thinking my metaphor is flawed, it would behoove you to consider who is interviewing whom during this experience. Your signup form is indeed asking all the questions, however it is not evaluating and passing judgement. Today's users have a multitude of choices for where they spend their online social lives and they have the average attention span of a sand flea. The most effective signup forms ask users for just the basic info, then get them in using your site quickly and easily. You can always prompt them to enter the non-essential stuff later.
To demonstrate the difference between poor and effective signup forms, we'll take a look at 2 examples. First, we'll examine the form over at Foursquare.

They ask for too much personal information right from the get-go. I have a feeling that quite a few people would ask, "What the hell do you need my current location and birthday for? I don't even know you people yet! Are you data mining for the thought police?!" Well....that's how many of my friends would react anyways.
As a developer, I know what these fields are for (geolocation api & server-side user permissions), but I seriously doubt even 1% of users will have a clue. If you're absolutely intent on asking them things that could potentially raise flags, at least provide some kind of explaination for why you need that information.
And then you'll notice the gray bars on the left and realize you still have 3 more pages of questioning to go! For many users, myself included, the signup processs here will seem quite cumbersome. And frankly, without prior aquaintance and a certain level of earned trust, a lot of people will just not be willing to spill their guts right away. More savvy internet users will not want to risk giving up their private information to some company or website they know nothing about.
On the other end of the spectrum, we have Gowalla's form. It asks users for just the bare essentials and provides a very simple, easy process for new members to signup. They even use AJAX (real-time) field validation to check if your chosen username is available. That little bit of hocus pocus helps to streamline the experience into a fast, one-step signup process.

The Gowalla signup process is so simple in its current form, I could even see them adding an optional field for users to upload a profile photo. Outgoing types will consider this essential, so it's definitely worth including as an option.
Attracting new members is what drives social networking sites and just like an interview with a new company, it is paramount to give a great first impression. Eliminating all the superfluous fields and only asking users to provide basic information will greatly reduce your abandonment rate and allow people to quickly gain access to all the awesomeness on the other side.
