This can be a problem if you are running iManager on Windows 2000 machine with IIS as the web server, since iManager install doesn't automatically configure the certificate for you in that scenario.
If you later create a container with users outside the portal users container, and these users can't access Forgotten Password and Reset Password features, you'll need to specifically assign rights to the following gadgets for that new container: Challenge Response Setup, Change Universal Password, Hint Setup.
For instructions on adding new users to the portal users container, see Portal User in the Novell exteNd Director Platform Edition Installation and Configuration Guide.
One common cause of this error is that the PortalServlet.properties file is pointing to an LDAP server that does not have the NMASTM extensions that are needed for Identity Manager. Open the PortalServlet.properties file and make sure the address for the LDAP server is the same server where you installed Identity Manager.
Other possible causes: