Having viewable profiles has a couple of key advantages. Search engines will spider them so if you have commercial companies or the likes register, when someone googles their company, their profile on your forum quite often comes up which is quite handy. It also fosters a spirit of openness towards guests (ie. welcoming them) because when they click on a member they can see full details and contact details etc. And if you have site sponsors, having their profile visible to everyone is a good selling point for advert services.
The only downside really is spam. It can encourage spammers to register just to try and peddle their wares, or leave spammy visitor messages which can be hard to find and remove (I reported a couple here on Xenforo profiles, for example).
The best solution IMO is viewable profiles by guests but restrict the ability to leave (or view) visitor messages to established members - but you'd need to check the various forum packages for whether they can do this.
Just a personal opinion, but when using forums I find profiles being hidden from guests quite annoying, and we must always put our readers first, so I would not ever stop access to profiles for guests just because I think it will encourage sign ups - it won't.
well, the only thing which annoys me is that users are entering their Instant-Messenger-ID´s into their profile and then spammers will contact my members.... this is the downside, so I was trying to remove the IM-fields completely.....
hm most bots can already register without problems?!
BUT i agree, there should be some limits / permissions and the user should be able to set the visibility of everything (messenger IDs, profile fields,..) on the privacy page.