Getting users to sign up for a new site can be difficult. As a product designer, simpler is nearly always better, which has led to signup forms where users are only asked for an email (they get a randomly generated password emailed to them). Facebook Connect and OAuthing in via Twitter have also become viable options, but there are always uses for more information about users to personalize and improve the service.

The old way of collecting information is one that many sites still attempt: collecting all of this information up-front:

Registration forms like this often encourage users to give up during registration, meaning low user counts, low ad revenue, and no opportunity to upsell to other products later.

LinkedIn did a good job innovating in this respect. They don't require a full profile during registration, but gently remind users that they should fill out more information:

CommonRed is a social networking startup that's using the same technique as LinkedIn, but has taken it further. In addition to the gentle nudge from "% Profile Complete", they have a sidebar widget that asks users simple questions.

CommonRed is a networking startup, so they ask simple questions about hobbies that users can connect over. As a user clicks answers, each question fades away and is replaced by another.

This interaction is valuable. Not only does it get more users into your product, but it also gets you more information about those users in a pain-free way (I've personally answered at least 10 of these because I found some of the oddball questions interesting, and I wondered what was coming next). Think of how it can be used in your own product: gauging interest in new features, collecting demographic information for marketing, or even setting preferences.