Regular Players
There are three ways you can refer people.
-Personalized link: neopets .com/refer.phtml?username=YOUR USERNAME HERE
-Premade buttons and banners. Neo provides the html for these. They can be found here: neopets .com/banners.phtml
-Neobadges. These can be found here: neopets .com/neobadge.phtml
So what’s the point of referring? You get rewards, of course! The prizes you receive are accumulative, so you at each specified amount of referrals, you will get the corresponding reward. For example, if I referred 1 person, and then 1 more, I would receive 100nps and then another 200nps.
Prize list- taken directly from Neo’s referral page.
1: For the first signup, you will receive 100 neopoints.
2: For the second signup, you will receive 200 neopoints.
3: For the third signup, you will receive 500 neopoints!
5: For 5 signups, you will receive a randomly selected Rare Item OR 1,000 neopoints!
7: For 7 signups, you will receive a randomly selected Bottled Faerie.
10: For 10 signups you get a One Dubloon Coin, which can be used for many things on Krawk Island.
15: For 15 signups you get a random Codestone, which can used at the Training School!
20: For 20 signups, all of your pets will gain a level. (cool!)
25: For 25 signups you get a Five Dubloon Coin, which can be used to do MORE things on Krawk Island!
30: For 30 signups, you will be richly blessed by a set of Bottled Faeries!
40: For 40 signups you get loads of Codestones! These mystical stones will help your pet at the Training School to become a Grand Master!
50: For 50 signups, you will receive a randomly selected basic colour Paint Brush!!
75: For75 signups gets you a SUPER RARE ITEM, one that you can probably sell for thousands!!!
100: For 100 signups you will receive a MEGA RARE randomly selected exotic coloured Paint Brush!!!
You can keep track of how many people you’ve referred and who’s inactive or frozen here: neopets .com/referralslist.phtml
Seeing as you don’t have to do much except post your link places and ask people sign up, I’d say it’s pretty worth it to get referrals. 
Premium Players
It’s a little easier to get rare items referring premium member because of you’re making tnt a lot of money.
The plus side to premium referrals is that Neopets does not always allow people to sign up on their own, meaning they need to be invited by a current premium member (You!).
You refer people by inviting people to join premium. To invite someone, go to Portal>>Quick Links>>Refer a friend. Then fill in the name of the person you’d like to refer and they will be sent a Neomail with sign up instructions. You have a limited amount of referrals (10), so make sure the person you’re inviting is serious about buying premium.
You cannot refer others until your 15 day trial period is over.
Prize list: In order to receive your reward, the person referred must continue the premium service after the 15 day trial has ended.
1st Referral: 1000 np and 10 random Codestones
2nd Referral: Lucky Space Faerie Charm
Randomly doubles your NP award from a flash game.
3rd Referral: Paint Brush. Chose from Disco, Electric, Snow, or Starry
4th Referral: Premium Avatar
5th Referral: Space Faerie Sidebar Theme
10th Referral: Choose One of 5 packages
Battledome Package:
Downsize!, Earthen Scorchstone, Lost Desert Dagger, Scarab Stone Slingshot
Garden Package:
Furry Autumn Bushes, Rubber Plant, Star of Paradise Flower, Stylishly Simple Pond, Yellow Chomby Gnome
Musical Instrument Package:
Accordion, Harmonica, Oboe, Piano, Saxophone, Silver Triangle
Purple Package:
Purple Juppie Pudding, Purple Mynci Puppet, Purple Poogle Toy, Purple Zafara Plushie, Purple Skateboard, Purple Stocking, Regal Purple Petpet Cushion, Purple Ixi Acorn
Stamp Package:
Assorted Fruits Stamp, Coco Stamp, Esophagor Stamp, Hubrid Nox Stamp, Island Native Stamp, Mystery Island Kougra Stamp, Skeith Bank Manager Stamp
15th Referral: Choose One of 6 packages
All Packages From the 10th Referrals
Plushie Package:
Baby Zafara Plushie, Cloud Kiko Plushie, Island Acara Plushie, Yellow Yurble Plushie
20th Referral: Choose One of 7 packages
-All Packages From the 10th & 15th Referrals
-Cupcake Package:
Chocolate Poogle Cupcake, Gooseberry Cupcake, Iced Eyrie Cupcake, Kreludan Jelly Cupcake, Olive Cupcake, Orange Kougra Cupcake, Pomegranate Cupcake
If you end your premium service, you will lose some of the rewards including the Premium Avatar, Space Faerie Sidebar, and Lucky Space Faerie Charm. If you reactivate your service, you will get them back without having to refer people again.
