Thanks for the hack!! I second the motion for possible integration for the next release, hats off to everyone in the community and the core cb team!! (^_^)
I've replaced the login snippet in this posting, and it worked for me, I'm using Joomla 1.0.15 with cb 1.1, mod rewrite on and joomla sef (no component or htaccess hacks).
NOTE: for those who are using joomlaXplorer to modify the code, please be aware that (for me at least) it was adding random:  's in the mentioned sections if you are copying directly from the posting. Ended up FTPing the files and using an editor to modify.
Although, I can't tell if the password recovery code works cause I keep getting a reply of "Password Reset Failed!" BUT, if i replace all the original code dealing with the normal password recovery, I still get the same response so the problem lies elsewhere. Anyone else getting this problem?