Cartella must have access to a network SMTP server when a new user account is created and when a user requests a new password. If the SMTP information is not correct, users won't receive system-generated passwords and won't be able to log in.
You can configure a Cartella site to send emails to a specified pick-up directory. You can also customize Cartella's default email templates or add new templates. See Email Templates in the Developing Cartella section for details.