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Does this happen to any member or just one?
I've had this happen many times with some members of a XOOPS site. Their ISP rejected the emails sent from the site because the IP is on a spamlist. The site shares a mail server with a spammer and is often listed on the spam lists (they'll be moving from this host soon). So when the ISP receives email, sometimes it is rejected until the matter is cleared up and the site is de-listed. ISPs that usually reject are comcast and verizon.
Sometimes, the password email gets placed in a junk folder, as often happens with Yahoo email and the member says he didn't get the email when in fact, it's sitting in the junk/spam folder.
Hope
[size=x-small]Working sites:
XOOPS 2.0.16 PHP 5.2.2, MySQL 5.0.24a-standard-log, Apache/2.0.54 (Unix)
XOOPS 2.2.4, PHP 4.3.10, MySQL 3.23.58, Apache/1.3.33 (Unix)[/size]