I just had this same meltdown last night. Everything was fine, then my client noticed when I presented her with my fine work, that she could not create an account. I wrestled with this for hours, then found this thread and remembered that one of my language files was dropped in transfer last night. I had re-upped it, I thought, but now that I re-upped my languages folder, everything is FINE!

Customer account creation works perfectly now.

Thanks!