Approval Process Breaks Half Way

I have isolated the problem. I am using WP User Frontend Pro and the Buddypress Integration Add On to create a custom registration form. When I went back to using the default Buddypress registration form Buddypress Registration Options works again.
Any ideas why this might conflict?

The problem is that my custom registration process sends out a verification email that is not the same as the Buddypress default registration email. Here is the code from my custom registration form:

// send user notification
                if ( class_exists( 'Theme_My_Login_Custom_Email') ) {
                    do_action( 'tml_new_user_registered', $user_id, $password );
                } else {
                    wp_new_user_notification( $user_id, $password );
                }

I believe that wp_new_user_notification is not the right email for me to be sending to a new user for email validation. This function sends an an email with username and password details to the new user instead of the verification link.

What I would like to confirm is whether this is the problem with my registration process not working. Does BP Registration options hook into the verification email sent to the user? When the new user clicks on the verification link is this where BP Registration Options begins to work its magic?

I am still hunting for the fix to this. If you happen to know the name of the verification email function that you hook into then I would appreciate it!!!
Thanks
Hugh

Thanks Michael,
I appreciate the explanation.
Much obliged!
Hugh