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I registered at both. I thought that the selection was better at Target. Some women from church are hosting my baby shower. Since several of the women attending are elderly and there is only a Wal-Mart in town, I decided it would probably be easier for them if I registered there. I think my and DH's co-workers will be more likely to buy things from Target.
I will say this - Target's return policy is notorious for changing for the worse... Took us four hours to exchange a carseat because they changed UPC codes (not the style of seat)...
But in all seriousness, register at both, just not for the exact same items...