My Toad 8.6.1 use to save and store the connection passwords but all of a sudden it stopped doing that.
Toad 8.6.1 does not support an Oracle 11g server as it was released before 11g came on the scene. 11g is the first version to support case sensitivity in passwords which Toad 8.6.1 could have an issue with.
Check to make sure your DBA did not upgrade to an 11g server and that the 11g feature for password case sensitivity is not turned on. If the DBA did upgrade to 11g server, please download at the minimum Toad 10 which does support 11g server.