I think you'd attract/retain more users if you added a way to demo the game without having to login/register (despite the fact that the registration is quick and easy), and then prompting them register after completing one or two quests.
In my experience, people turn away as soon as they see the a registration form if they haven't had a chance to play first (or unless the game is already very popular). Do you have any analytics running on your site to track the bounce rate?
