Invite users creates an invite only user registration system. Visitors can submit to a waiting list, or you can quickly invite people using their email. All users are allowed to invite other users in this manner. When a user is invited, he is emailed a password which allows him to access the register page. You can re-run this password generation via a job. It is suggested to install Nontab, so that you can automate running this job and increase security in not letting unwanted users register.
Note: the encryption process requires the php mcrypt extension. Without this the password to register will not be secure, however it is not required for the addon to work.