ASP.NET Web Api (REST): Authentication using the users credentials or a token? Leave "Register new user" resource password free?

The following link appears to cover some sensible DIY options http://codebetter.com/johnvpetersen/2012/04/02/making-your-asp-net-web-apis-secure/. The "Tokens based on Public/Private Keys" section covers an approach I have used effectively in the past and would maybe be of assistance to you.

At the moment though I am using http://identityserver.codeplex.com/ the Thinktecture IdentityServer with OAuth bearer tokens ("Resource Owner Password Credential" grant type)... I am finding this a very good set of code and examples to work from and have IOS clients obtaining tokens and calling the WebApi.

If you really must secure your registration screen you could maybe use client certificates installed on the devices to authenticate... again the Thinktecture service could help here https://identity.thinktecture.com/idsrv/docs/default.htm?RequestingatokenusingOAuth2.html. Although if you registration process is secure What are best practices for activation/registration/password-reset links in emails with nonce e.g. email confirmations and activations etc. it may be safe to leave publicly accessible - this all depends on your business requirements and desired sign up workflow.

You should at least use Transport Level security SSL but as you suggest message level security e.g. encrypting any tokens is very advisable - the OAuth spec has something to say about this http://self-issued.info/docs/draft-ietf-oauth-v2-bearer.html#mitigation.

Regarding expiring tokens - we tend to expire our tokens with the same frequency as our password changing policy; although keeping the validity time down is important (to minimise impact of token theft) and a consideration to balance against your requirements. OAuth has the concept of refresh tokens Why Does OAuth v2 Have Both Access and Refresh Tokens? some debate and links around this topic here, we are not currently using this approach as the ID server we are using doesn't currently support this.

Keeping your tokens safe is also a consideration e.g. we are using the KeyChain in IOS, but also think about Mobile Device Management policies if possible as if these tokens or passwords are one the device they could be stolen, perhaps look into jailbreak detection, lock screen enforcement etc.