User cannot login to an Oracle database with Toad because they receive the error:
"Invalid option for alter session."
DBA also does not want to grant the ALTER SESSION system privilege to the user. Does Toad require the ALTER SESSION privilege be given?
An Oracle 8i client might be the cause when connecting to a 10g database. With an 8i client, Toad appears to pass on an ALTER SESSION command using 8i syntax.
Upgrade your Oracle client to match your server version.
After installing the 10g Oracle client, make sure the PATH and TNSNAMES.ORA file location are updated as well.