As said, it depends on the level of security required, however, if you need a higher level, some novel solutions I have seen include;
Displaying half of the temporary password when the user's identity has been confirmed (security question, email address etc.) then the other half being sent to the email account. If the email account has been compromised, it is unlikely that the same person has also managed to perform a man-in-the middle attack. (Seen on UK Goverment Gateway)
Confirming identity via email and another medium - for example a code sent via text to a registered mobile. (Seen on eBay / PayPal)
For somewhere in between these two extremes implementing security questions may be the way to go as mentioned by DaveG.