I have the exact same problem.. users registered, and I can see them in my admin screen, under users & authors, but the passwords are not being emailed to them. We’ve already gone thru checking junk mail folders.
Any help is greatly appreciated.
Thank you
[Update: I just tried to retrieve lost password and got this message:
The e-mail could not be sent.
Possible reason: your host may have disabled the mail() function…
I will be contacting the ISP and keeping an eye here in case it’s something I can fix.]
What did you find out from your ISP? I use Yahoo and they can’t confirm if the mail servers my WP blog uses is administered by them or WP. I also get the same message you did about the host disabled mail function. I tried to enable it from the wp-login file, but that was pretty useless.