Joomla 3.2.0 is a result of terrible coding and total irresponsibility: users registration and password reset are broken and passwords are not recognized. Please note that Joomla 3.2.1+ doesn't have these issues.
We suffered from this a couple of days and finally propose a solution, though you can just install Joomla_3.1.6-Stable-Update_Package.zip and downgrade.
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