A lot of folks commenting sound pretty skeptical - with good reason, of course - but I can't help look at that form and catch myself thinking 'gee, that looks fun to fill out'. I think its really clever.
I'd also suspect seeing your full name in the paragraph would be more reason to use accurate information. Not to mention maybe there could be spam and security benefits in there too
Really like to hear if anyone does some tests against this
I went with a similar strategy with a site I put together, JimAsks.me ( http://www.jimasks.me ). I went as far as to create the account for the user with pseudo data, and then giving them the chance to go back and update the account data if they wish. If anyone answered a question, regardless of whether they had created an account or not, I wanted to be able to display that response and by tying it to a persona, I was able to do that. This signup process was presented in a paragraph form similar to the site discussed here (just answer a question you'll get a chance to "change your account" where you'll see my form).
I didn't see any uptick in those who signed up. But the generation of anonymous accounts on behalf of the user certainly did increase the interaction with my site.
* "I'm given you" -> "I've given you", "I'm given", "I'm giving you", or "I'm givin' you"
* It's not clear what the field after "from" is supposed to be
* "your email is [ ] with a password of [ ]" -- what do you want my email password for? Try "your email is [ ] and your password is [ ]".
I've been reading Don't Make Me Think and Rocket Science Made Easy, both by Steve Krug. Good stuff if you want to catch issues like these. Just a small amount of usability testing ("a morning a month") can bring significant benefits.