Starting Toad: "Invalid file, ...\CONNECTIONPWDS.INI ... Passwords will not be loaded ..."  </ (4329319)

When updating to Toad 9.7 and then starting Toad the following error appears and prompts for toolbar reset and displays the Oracle Licence statement:

"Invalid file, D:\Documents and Settings\<userprofile_name\Application Data\Quest Software\Toad for Oracle\9.7\User Files\CONNECTIONPWDS.INI.
This file cannot be shared among different machines for security reasons. Passwords will not be loaded, and file will be replaced."

If manually deleting the CONNECTIONPWDS.INI, it is possible to restart TOAD, but as soon as a password  is saved for any database connection, the problem reappears.