When trying to connect there is no client listed in the selection field. There is no database listed in the drop down.
Go to Environmental Variables and verify that the needed Oracle Home is the first entry in the PATH variable in Environmental Variables (Control Panel | System | Advanced | Environmental Variables).
If needed, a TNS_ADMIN string can be added to Environmental Variables and directed to the location of the tnsnames.ora file.
In QCTO's connection window, use "Direct" connection (instead of TNS). Leave the client field blank. Similarly, connection can be made for the Repository Manager or when Installing/Updating the repository.
Waiting for fix in a future version of Quest Code Tester for Oracle.