If you specify a maximum number of participants, all registering participants after the maximum number has been reached will be placed on a waiting list. This will allow you to control the size of your brackets and can be especially useful if you're trying to avoid byes (See https://challonge.uservoice.com/knowledgebase/articles/254697-why-some-participants-go-straight-to-round-2)
If you choose to make your sign-up page publicly visible, a Sign up link will appear above your bracket before it is started. Otherwise, only people who are given the sign-up link displayed from the 'Edit Settings' page will be able to register. Note: We are working to make tournaments with open registration easier to find in future versions of Challonge.
A Challonge user account is required to register for any tournament with open sign-ups. Any anonymous to view the sign-up page will be asked to either create an account or log in to an existing account before they are allowed to sign up. Once they are logged in, they will be redirected back to the sign-up page.
Once logged in, the user will be presented with a Sign up button. By pressing this button, they will be entered into the tournament.
After all of this is complete, this user will be ready to participate!