"Myth: I've heard two factor authentication doesn't work in IMAP and POP"

I've found this to be true - to a certain extent. I had two factor authentication turned on and found it to be a nightmare in OSX Mail. Failures to retrieve mail, asking for my password constantly, etc. I was resetting the application passwords every two days. I tried to research a fix, but in the end it became less of a hassle just to turn it off and have my email work 100% of the time.

It's probably a bug in Mail.app in Lion, but I can't say my experiences with two factor auth have been positive.