I'm coming in a little late on this thread, but since I've just set up a test board myself I thought I'd put in my 2 cents worth.
If you have cPanel, password protection is very easy to set. Apart from it being "in the rules" it's actually quite a good idea since you don't have to keep the board permanently closed, and you'd be able to create yourself a regular users account in addition to your admin account. This gives the opportunity to check everything from a users perspective - permissions especially, before transfering to a live board. If the board is simply offline you can only log in as an administrator, and there are some occasions when this may be a disadvantage.
The licence agreement states that a test board must be password protected, and must not be available to the public. It does not state that it must be permanently set as offline.
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