Note, this appears to be true Two Factor, even if you are trying to recover lost password, you will still need a minimum of two of the 3 following:
- Apple ID password
- Trusted Device [ SMS capable phone OR iOS device with Find My iPhone enabled]
- Recovery Key [14 digit Recovery Key Apple provides, they say print and keep in a safe place]
This has both a Pro, since it will be very hard for someone to Hack if your using strong a password.
As well as a Con, if you forget or lose 2 of those 3 things, you will be locked out of your Apple account forever, and would have to get a new one.
You can have multiple Trusted Devices though, and there is no reason you can't have a couple of hard copies of the Recovery Key in safe deposit box and home or office safe.
And if you use a good Password Keeper, also known as Password Manager, like LastPass https://lastpass.com/ you only need to remember one good password.
- Apple ID: Frequently asked questions about two-step verification for Apple ID: http://support.apple.com/kb/HT5570
- Apple ID: Can't sign in with two-step verification: http://support.apple.com/kb/HT5577
- [Trusted Devices] Apple ID: About SMS and two-step verification: http://support.apple.com/kb/HT5593
- Turning off two-step verification for your Apple ID: http://support.apple.com/kb/HT5631