I tried registering by specifing a password and having it generate one both. It gives the above error when following the link from the email.
When trying to use the login link it gives the follow result:
The email for this account has not yet been verified.
When I try to register the same login name it returns:
Login Name exists
So it is making the appropriate entries into the database, it seems to be isolated to the verify email portion. Perhaps an interim solution would be to turn off email verification until this gets fixed. That way people will still be able to sign up for the board.