Unable to connect to a 8i database with a 10g client. The 10g client will connect with 9i and 10g databases, but not with the 8i database.
Oracle does not support the connection of an Oracle 10g client to an 8i database. Install a 9i client and switch between different clients using the "Installed Client" drop down field in Toad's new connection window, depending on what version of database being accessed.
You need to use a 9.2.0.8 Oracle client to connect to that database.
Note:
Oracle documentation notes compatibility between Database versions 8.0.6 and 8.1.7 to client version 9.2.0. You need to make sure you have a 9.2.0 Oracle client.
Toad system requirements notes test and support for Oracle 8.0.6 and 8.1.7 servers and 9.2.0.8 clients.