Formatting timestamps is a difficult decision for REST APIs to make. I polled my networks a while back and got pretty much divided responses [1]. In the end, I opted for milliseconds over ISO 8601 and I've been happy with that choice for ease of processing and debugging, especially as I'm now using the same values in the URL for caching purposes.
1. Google Plus conversation remains https://plus.google.com/106413090159067280619/posts/Wtkhk9jU... Good luck finding it on Twitter