Each time Toad runs or when connecting to a database, a trace file is generated in one of these folders:
C:\Documents and Settings\<user_name>
As an example of trace file being created: "client_2912.trc".
This is an Oracle option and is not related to Toad. It can be changed via the SQL*Net editor in the login screen.
1. Launch Toad for Oracle.
2. Go to menu Session | New Connection.
3. Click the SQLNET Editor button.
4. Check that setting TRACE_LEVEL_CLIENT is set to OFF.