Jason, I've just managed to get around to dealing with the forgotten password issue.
Background: When user register, the pasword has no encryption.
I've copied/replaced the old the xml file with the new xml file that you sent me. I delete the cache. However after doing that, the same issues still exists - no 'show if messages' appear when you enter the email address and press submit. The progress wheel appears for a moment, but there's no message informing you that an email has been sent.
In a senario where I change the last field 'Password Encryption' in the server behaviour called 'SecurityAssist Email Encrypted Password' from MD5 to none (see pdf called 'forgot Password pop_up' - then in this senario, the progress wheel fails to appear and no email is sent - any reason? What exactly is this process doing of setting that to MD5 or none?