This can apply to various versions of Toad for Oracle.
If you have mutliple Oracle clients installed, the connection window in Toad allows you to choose what client to use when making your initial connection in Toad. There is a drop down field under the section noted as "Installed Client".
If there is already a connection made in Toad, it will not allow you to change the client. Please disconnect from all database, then go to the connection window to make a new connection and choose which client to connect with.